AERU
The Socio-technical Networks
of Technology Users'
Innovation in New Zealand:
A Fuzzy-set Qualitative
Comparative Analysis
Simon J. Lambert
John R. Fairweather
Research Report No. 320
October 2010
CHRISTCHURCH
NEW ZEALAND
www.lincoln.ac.nz
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The Socio-technical Networks of Technology
Users’ Innovation in New Zealand:
A Fuzzy-set Qualitative Comparative Analysis
Simon J. Lambert
John R. Fairweather
October 2010
Research Report No. 320
Agribusiness and Economics Research Unit
P O Box 84
Lincoln University
Lincoln 7647
Christchurch
New Zealand
Ph: (64) (3) 325 2811
Fax: (64) (3) 325 3847
http://www.lincoln.ac.nz/AERU/
ISSN 1170-7682
ISBN 978-1-877519-14-7
Table of Contents
LIST OF TABLES
iii
LIST OF FIGURES
iii
ACKNOWLEDGEMENTS
v
PREFACE
vii
SUMMARY
ix
CHAPTER 1
1.1
1.2
1.3
1.4
1.5
1.6
A NETWORK APPROACH TO TECHNOLOGY
USERS’ INNOVATION (TUI)
Introduction: innovation within a social network
Problematic level of innovation in New Zealand
Examples of New Zealand innovation studies that
consider context
A network approach to innovation: innovation
ecology and social capital
Research objectives
Conclusion
CHAPTER 2 METHODS
2.1
2.2
2.3
2.4
2.5
2.6
2.7
CHAPTER 3
3.1
3.2
3.3
3.4
1
1
3
4
5
8
9
11
Introduction: QCA and innovation studies
Identification and selection of case studies
The process of scoring cases
Causal variables: the key socio-technical networks
in innovation
2.4.1 Financial capital
2.4.2 Government support
2.4.3 Intellectual property
2.4.4 Manufacturing
2.4.5 Business activities
The outcome: innovation success or failure (S)
Additional data sources
Conclusion
15
16
17
18
19
20
20
22
22
CASE STUDY RESULTS
23
Background characteristics of the inventors
fsQCA data
Overall fsQCA analysis results
3.3.1 Pathways to success
3.3.2 Pathways to failure
3.3.3 Comparisons across sectors
Conclusion
23
25
27
28
30
31
32
i
11
12
13
CHAPTER 4 THE CONTEXT OF INNOVATION
4.1
4.2
4.3
Introduction: TUI networks and nodes
The context of innovation for each key variable
4.2.1 Capital
4.2.2 Government support
4.2.3 Intellectual property
4.2.4 Manufacturing
4.2.5 Business activities
4.2.6 Miscellaneous issues
Conclusion
CHAPTER 5 CONCLUSIONS
5.1
5.2
5.3
5.4
33
33
33
33
34
35
36
38
39
39
41
Introduction
Core results and their implications for theory
Core results and their implications for policy
Conclusion
41
41
43
47
REFERENCES
49
APPENDIX 1 GOVERNMENT FUNDING INITIATIVES
53
APPENDIX 2 INTERVIEW SCHEDULE
54
APPENDIX 3 OVERALL SUCCESS
55
APPENDIX 4 OVERALL FAILURE
58
APPENDIX 5 FARMING SUCCESS
60
APPENDIX 6 FARMING FAILURE
61
APPENDIX 7 BUILDING SUCCESS
62
APPENDIX 8 BUILDING FAILURE
63
APPENDIX 9 ENERGY SUCCESS
64
APPENDIX 10 ENERGY FAILURE
65
APPENDIX 11 CASE STUDIES
66
APPENDIX 13 NEW ZEALAND TECHNOLOGY INNOVATION
STATISTICS: COMPARISON WITH BEST COMMONLY
AVAILABLE TECHNOLOGY
83
ii
List of Tables
Table 1.1: Gross R&D expenditure as proportion of GDP
(selected OECD countries and total)
Table 2.1: Crisp set variables compared to fuzzy-set variables
Table 2.2: Fuzzy-set scoring for financial support (capital)
Table 2.3: Crisp-set scoring for Government support (Govt)
Table 2.4: Fuzzy-set scoring for IP
Table 2.5: 6-value scoring for the amount of manufacturing
an innovator (Manu)
Table 2.6: Crisp-set scoring for business activity (Biz)
Table 2.7: 7-value scoring for innovation outcome (Success)
Table 3.1: TUI data table of variable scores for all cases
Table 3.2: TUI truth table
Table 3.3: Comparison between sectors for innovation success
Table 3.4: Comparison between sectors for innovation failure
4
14
17
18
19
20
20
21
26
27
31
32
List of Figures
Figure 1.1: Positioning technology users as innovators
Figure 5.1: Model of the TUI network
iii
8
42
iv
Acknowledgements
Funding for the research reported here was provide by the New Zealand Foundation for
Research, Science and Technology, under contract number LINX 0801.
We also acknowledge the valuable assistance of the inventors who provided the core material
for study. They are an impressive group of Kiwi inventors and their willingness to share their
experiences made for rich and useful data. Diane Barraclough from IPONZ provided insight
and assistance in IP, as did Elspeth Buchanan (PL Berry and Associates) and Donald Ensor
(Ensor and Associates). Tony Smale (eNZyme intellect) helped with our understanding of the
New Zealand context.
v
vi
Preface
The topic of innovation is particularly popular at the present time, attracting the attention of a
wide variety of people including key policy makers in many countries. In parallel to this
interest is a focus on innovation to the extent that Innovation Studies is a specialist area in its
own right, embracing a number of traditional disciplines.
Research work in the AERU has covered innovation in a number of ways for many years.
This report continues this tradition but, in addition, provides an analysis of success factors
among New Zealand inventors seeking to commercialise their ideas. Here the focus is on
technology users who innovate, with this report being one of the key outputs of the Networks
and Innovation Governance research programme. The focus on inventors is important because
they are often overshadowed by innovation in universities and research institutes; it also
offers ways to consider how best to understand and support this form of innovation.
This report should appeal to those interested in what inventors think about the invention and
commercialisation process. It would also appeal to policymakers wanting to know how best to
support inventors.
Prof. Caroline Saunders
Director
vii
viii
Summary
Technological innovation by the actual users of technologies is receiving more attention, and
deservedly so, as these users combine their passions and expertise into improving the
technologies which they employ in their personal and professional lives. This report
documents technology users’ innovation (TUI) as an important source of inventions which
can become successful commercial innovations. Using a range of TUI case studies in the
farming, building and energy sectors, we utilise fuzzy-set Qualitative Comparative Analysis
(fsQCA) to describe configurations of participation in various network configurations that
result in innovation success and failure. Data are drawn from extended interviews with over
55 inventors and innovators, leading to 43 final case studies set against a broader analysis of
New Zealand’s innovation policies and practice. The method led to the identification of five
key elements within the socio-technical networks of innovation: financial capital, government
support, intellectual property (IP), manufacturing, and other business activities.
Results show the key configurations to innovation success involve inventors who were:
•
Well financed, not undertaking significant manufacturing, holding relevant
IP; or,
•
Well financed, engaged in other businesses, again with relevant IP.
The most common configurations leading to innovation failure were:
•
Poorly financed, lacking government support, not engaged in other business
activities, and lacking IP; or,
•
Well financed, lacking government support, engaged in other businesses,
undertaking significant manufacturing, and lacking IP.
The results were used to develop a model of TUI which shows how innovation is the product
of both individual inventive ability and the ability to selectively participate in the relevant
socio-technical networks within which the invention evolves into an innovation. A significant
resource on which these innovators draw is best understood as social capital, comprising
family farm(s) and firm(s), family members, and peers. The model highlights the potential
complexity of the TUI networks and shows how successful innovation requires the release of
an often intensely personal technology and through the proactive management of the key
factors.
The results also indicate that New Zealand’s innovation governance could be improved by
policy which better supports TUI, specifically by increasing and facilitating the availability of
financial capital and IP protection, expanding and supporting international collaboration
(especially in offshore manufacturing), and addressing ethics and trust in business. Wider
societal issues also constrain innovation in New Zealand. These issues would be mitigated by
an increase in the technological literacy of New Zealand society as well as a wider and deeper
appreciation of the necessity and difficulty of innovation, and the personal and economic
rewards when it succeeds. While much of the success of local TUI stems from the character of
New Zealanders, their knowledge and their passions, that success would be enhanced by
improving the connectivity of the New Zealand innovation system as a whole, and the
connectivity of this system globally.
Keywords: QCA, fuzzy-set QCA, invention, innovation; technology users; networks; social
capital; New Zealand.
ix
x
Chapter 1
A Network Approach to Technology Users’ Innovation (TUI)
1.1
Introduction: innovation within a social network
‘Innovate or die’ seems to be the harsh but proverbial motto of firms, regions, multinational
corporations and states. While innovation can, and does, occur across all areas of society, the
debate is dominated by technological innovation and its economic value. Yet in attempting to
observe and explain technological innovation, our attention is quickly drawn to the array of
spheres involved. Indeed, the sheer pace and scale of such innovation has meant that people
now experience some technologies as a somewhat ‘alien and uncanny force’, despite being
intentionally and systematically put in place (Rapp, 1981, p. 2).
But technological innovation is vital for economic growth and is therefore debated, measured,
theorised, and subjected to contested policy processes. Typically, such innovations have been
thought to derive from formal research and development organisations. However, an
important alternative source is from uniquely creative individual inventors. Popular myth in
New Zealand sees many significant innovations derived from these individuals, reinforcing
important parts of national culture and identity such as rugged individualism and success
against the odds. While these accomplishments are significant to New Zealanders, and
undoubtedly many other societies, we argue that it is the social networks of these individuals
that are important and while inventiveness is a necessary condition for success, it is certainly
not sufficient.
While the New Zealand economy has struggled to maintain its previously high socioeconomic rankings (Drew, 2007; OECD, 2009), even if pertinent macro-economic indicators
were in some way satisfactory, the pressure to innovate at all levels of the economy would not
cease. Indeed the term ‘innovation’ now appears as a global synonym for ‘economic growth’,
‘productivity’ ‘development’, even ‘sustainability’. In New Zealand successive governments
accepted technological progress as ‘the only sustainable way to a nation’s long-term
productivity growth’, which is considered ‘essential’ for long-term international
competitiveness (Williams, Debski, & White, 2008, p. 2). 1
While coarse indicators, or rather the forces underlying them, build our understanding of
innovation, inventions have also originated from beyond the reach of these macro-level
proxies, or at least from outside formal organisations such as universities, research
organisations and large corporate entities. Small-scale firms and individuals with an intimate
material and social association with a particular technology, and often without formal
qualifications, professional research networks or funding, have produced significant
innovations. Indeed New Zealand’s modern mythology is replete with innovators as heroes:
Sir Ernest Rutherford, a small-town boy who went on to split the atom; Sir Edmund Hillary,
the conqueror of Everest who went on to drive a (modified) tractor to the South Pole and jet
boat down the Ganges; Bill Hamilton who invented the jet boat; Bill Gallagher, a Waikato
farmer who developed electric fencing; A.J. Hackett, who made millions from jumping off
tall structures tethered with elastic and so on. Indeed, it is the inventiveness of farmers such as
1
Such a discourse provides its own indicators such as business expenditure on research and development
(BERD), which is 0.49 per cent of GDP in New Zealand compared with an OECD average of 1.53 per cent.
Other proxies, often labelled science and technology indicators (STI), are R&D budget allocations, the number
of PhDs (particularly in science and engineering field) and the number of patents and bibliometric citations
(Gluckman, 2009; Godin, 2003; see also Smith, 2005).
1
Gallagher and self-taught engineers such as Hamilton that epitomise the ‘end-user innovation’
(von Hippel, 1988) that is colloquially described in New Zealand as ‘back shed’ and ‘number
8’ wire Kiwi ingenuity. 2
This romanticism is in one sense comforting for New Zealanders – we have the history and
cultural resources to innovate – yet is at best an inadequate account of what is occurring, and
at worst a quite misleading one. Rutherford was ensconced within one of the world’s great
research institutions with three Nobel prize winners (including himself) on staff and with
several hundred students, the best of which undertook the menial tasks of experimentation
(Cathcart, 2004). Similarly, Bill Gallagher, heartland farmer, incorporated ideas from
America and went on to head the Gallagher Group which now employs its own engineers and
holds over 500 patents (Gallagher Group, 2008; Intellectual Property Office of New Zealand,
2009). Hamilton attended a preparatory school and then one of the best private colleges in the
country, and travelled more than once to England where he entered and won several motor
races (Hamilton Jet, 2009). Ed Hillary’s diverse activities were successful in part because he
became quite adept at cajoling support and funding from influential sources. Our rugged
individualists turn out to be rather adept social players.
This study focuses on three key sectors for New Zealand development – farming, building,
and energy – that are also globally relevant. Our research is informed by Science and
Technology Studies (STS) approaches to bridge the gap between the technological
determinism paradigm, which assumes research and development (R&D) propels innovation,
and the social science tendency to avoid technological determinism (Sismondo, 2004).
Technologies and innovation are continually present, sometimes intimate and yet always
malleable expressions of society, a discourse which accepts the inextricable sociality of
things. In the words of MacKenzie and Wajcman (1999, p. xiv):
“We live our lives in a world of things that people have made. As human
beings, we have both relations to each other (…society) and also relations
to the things we have made and to our knowledge of these things …
technology.”
In effect, all technologies occur within a social network and it is the management of these
socio-technical networks that is important for innovators, policy makers, and society. We
argue that inventors selectively participate in the socio-technical networks relevant to their
particular efforts at innovation. We further argue that such selective involvement in financial
capital, government support, IP and so on can be measured, with membership scored
according to criteria emerging from both theory and the substantive knowledge and
understanding accumulated from our case studies.
We use the following key terms which will be elaborated and built on in Chapter 2:
•
Technology user: a person who uses any item of technology broadly defined
to include both widgets and processes.
2
There are a number of popular publications displaying and idealising this Kiwi ingenuity. See, for example
Hopkins (Hopkins, 1998, 1999, 2002, 2004); also Bridges & Owens (2000) and (Hogan & Williamson, 1999). A
bimonthly magazine called ‘The Shed’ is currently published and portrays examples of the type of invention we
focus on (www.theshedmag.co.nz). For an interesting history of science innovation in New Zealand, see
Galbreath (1998).
2
•
Innovation: an invention carried through to commercial production and
distribution
•
TUI: Technology User’s Innovation.
•
Innovation success: the commercialisation of an invention such that there
are significant levels of sales either nationally or internationally.
•
Socio-technological networks: interconnections between people and
technologies.
•
Innovation governance: assemblage
organisations focused on innovation.
of
policies,
institutions
and
This report contributes a new method for describing and understanding innovation by using
Fuzzy-set Qualitative Comparative Analysis (fsQCA) to analyse case studies of invention
according to their participation in, or membership of, networks. Importantly, fsQCA can
incorporate both qualitative and quantitative data and accepts that causation will be
configurational (i.e., more than one factor will be involved) and that more than one
configuration may exist (Ragin, 2000; C Ragin, 2008; Rihoux & Ragin, 2009).
1.2
Problematic level of innovation in New Zealand
Having introduced the case for giving attention to what we term socio-technical networks in
which important innovation occurs, we now need to take a step back and consider the state of
innovation in New Zealand. New Zealand is an open but physically isolated neoliberal
economy of just over four million citizens, reliant on primary exports, especially agricultural
products, and tourism. 3 The country has a well-developed education system, high levels of
literacy, and enjoys relatively a benign security environment and a very high quality of life for
many of its citizens.
But concerns over New Zealand’s economic performance are long-standing (Crocombe,
Enright, & Porter, 1991; Easton, 1997; Kelsey, 1995; Saunders, Dalziel, & Kaye-Blake,
2009). By standard indicators, the New Zealand economy continues to underperform, and the
decline relative to its competitors, especially neighbouring Australia, has not abated. 4 While
committed to a model of economic development that accepts technological innovation as
vital, the country struggles to match the investment of those countries with which it stand in
self-conscious comparison (see Table 1.1).
Business expenditure on R&D also lags internationally, although there are exceptions.
Johnston (1991, p. 3) examined the technology strategies of New Zealand firms and found a
significant number ‘recognised and responded to the challenges presented by deregulation and
trade liberalisation’. Though there is a low level of industrial R&D (0.3 per cent of GDP
compared to an OECD average of 1.1 per cent), the expenditure of those firms that do engage
in significant R&D was comparable to international competitors. Further evidence points to a
decline in the number of New Zealand companies, particularly small and medium-sized
3
Recent Statistics New Zealand data quoted by Proudfoot (2010) show that 66 per cent of New Zealand’s
merchandise exports derive from agribusiness and food-related products.
4
According to the OECD (2009: 54) New Zealand GDP per capita was US$27,100 in 2007, 25 per cent below
Australia and 12 per cent below the OECD average. Compare this with the early 1970s when New Zealand’s real
GDP per capita was approximately equal to Australia’s and about 15 per cent above the OECD average. From
1970 to 2006 it grew at an average annual rate of only 1.2 per cent, the lowest rate apart from Switzerland among
26 OECD countries with comparable data. New Zealand’s relative standard of living fell below the OECD
average by the early 1980s and bottomed at 20 per cent below the OECD average in the early 1990s.
3
companies, being ‘fully up-to-date’ with the best commonly available technology (see
Appendices 13 and 14).
Table 1.1: Gross R&D expenditure as proportion of GDP
(selected OECD countries and total)
Country
Australia
Denmark
Finland
Ireland
Norway
Sweden
OECD Total
%
2.01
2.46
3.45
1.32
1.52
3.74
2.26
NZ
1.16
Source: (MoRST, 2008, Table 2:03)
Some studies suggest that innovation may be enhanced if R&D spending were increased
(Ministry of Research, 2010). While the current government has initiated a number of reports
into, among other things, science and innovation, wider issues such as capital markets
(Capital Markets Development Taskforce, 2009) and telecommunications (van Wyk, 2009)
have also been identified as significant for innovation. While this may well be the case and we
have no issue with such initiatives, we seek to compliment this policy position by considering
how innovation may be enhanced by focusing on technology users’ innovation (TUI) and the
social contexts in which this type of innovation occurs.
1.3
Examples of New Zealand innovation studies that consider context
Our approach is not unprecedented and there are a number of studies that have given explicit
consideration to the social context of innovation. Winsley (1997, p. 8) examined technological
innovation in New Zealand between 1981 and 1993, a ‘dynamic process undertaken within
the strategic governance framework of a firm’. He found that human capital and wider social
processes were fundamental to technological innovation. Similarly, the New Zealand
Innovation Project published a remarkable collection of case studies that give very good
descriptions of the socio-cultural context of innovation in Zealand (Gilbertson, Gilbertson,
Knight, & Wright, 1995; Gilbertson, Knight, Kukutai, & Cooper, 1992; Winsley, Gilbertson,
& Couchman, 2001). Drawing on the experiences of the managers of innovation, and
recording rich narratives of business praxis, it seems success occurred despite, and not
because, of New Zealand’s formal innovation system.
Broader cultural beliefs are also connected to innovation (Henrich, 2001; Hofstede, 1984;
Hussler, 2004). Perry (2001) examined the theory that small industrial economies such as the
Nordic countries experience trust emanating from shared backgrounds and the likelihood of
physical, social and professional proximity, which pressures participants to ‘play by the rules’
(The Listener, 2010; Yandle, 2010). This proximity and trust are thought to facilitate the flow
of information across business communities, with tacit assurances that other members will not
take undue advantage while still benefitting from sharing information and other resources.
The consequent reduction in risk and costs is undoubtedly conducive for business.
4
Perry (2001) sought to replicate these findings in New Zealand, surveying business managers
and coordinators. Most respondents believed ‘perceived commonality’ makes business
cooperation relatively easy to establish, although around two-thirds did not believe that trust
existed irrespective of an enduring work experience. In contrast to the Nordic shared trust,
‘mutual experience’ was found to shape the degree of trust amongst New Zealand managers.
Interestingly, Perry found the significance of exclusion from a professional group is lower in
New Zealand, meaning that breaking trust may bring minimal sanctions. Results also show
indicate large companies were disinterested in mutual development opportunities with small
firms, and foreign-owned companies were less inclined to cooperate than were locally owned
businesses.
Scale and isolation are regular and significant factors in New Zealand’s economic operation
(McCann, 2009). Hendy (Hendy, 2009) investigated New Zealand patent distribution,
highlighting scale with evidence that innovation as measured by patents per capita increases
with city size. Correcting for city size, New Zealand cities perform similarly to Australia and
Canada but larger cities will always attract more inventors, drawing in more people, capital
and allowing more knowledge spillovers than smaller centres, although Hendy also found
many large communities of inventors connected via co-patents.
Important insights have been gathered by Smale (2009) who has identified a connection
between the Kiwi approach to the initiation of innovation, in which we have considerable
strength, and its subsequent implementation, in which we do not. Interestingly for the
purposes of our report, Smale reiterates that the workplace is a primary source of innovation.
Smale interprets how New Zealanders negotiate innovation in a global context in which
national culture is ‘software for the mind’ that, in the case of New Zealand, tends to limit
opportunities.
These few studies illustrate approaches which consider the social context of the innovator.
However, they have not made a significant contribution to our understanding of how sociotechnical networks directly affect innovation. Accordingly, we turn to more generic social
science literature to better understand this topic.
1.4
A network approach to innovation: innovation ecology and social
capital
The importance of technological innovation was identified over 150 years ago by Mill (1848)
in his Principles of Political Economy where he described four fundamental sources of
national wealth, namely capital, labour, land and what Mill labelled ‘productiveness’. While
economists would better articulate the relationships between these four variables over time,
(see, e.g., Romer, 1990), a simplistic linear model of research investment leading to
development (the classic R&D model) has only lately been overturned by the identification of
complex networks leading to technological innovation and the establishment of a broad
church of innovation (Dosi, 1982; Gibbons & Johnston, 1974; Kline & Rosenberg, 1986;
Rothwell et al., 1974). As Easton (1997) points out, the ‘arithmetic residual’ of
‘productiveness’ has no explanatory ability, indeed has been described as a ‘coefficient of
ignorance’ (Balogh and Streetan, 1961, cited in Easton, p. 204). The fundamental flaw was
articulated by Dosi (1982) who could not accept that expenditure on R&D somehow results in
the prescient production of new goods and services needed by willing consumers. He was
equally dismissive of the ‘demand’ or ‘market pull’ interpretation, which meant the existence
of an imminent demand, expressed in prices or expectations of future prices, which firms
somehow recognise and respond to by developing new goods and services. Dosi theorised the
5
existence of technological paradigms which he defined as the set of procedures for the
definition of problems and the specific knowledge of their solution.
In attempting to observe and explain innovation, our focus is quickly challenged by the sheer
multitude of actors involved, and the wide-ranging and often unintended effects of many
innovations. Not only is technology all-pervasive and both tangible and intangible, but the
sheer pace and scale of innovations has meant that although technology is ‘intentionally and
systematically’ put in place, it is increasingly experienced as a somewhat ‘alien and uncanny
force’ (Rapp, 1981). Considerable attention has been given to the study of innovation, which
in turn has led to a general acceptance that much of what influences innovation takes place
through networks. As Akrich, Callon, & Latour put it:
The nuts and bolts of the plot are well known. On the one hand is invention i.e.
ideas, projects, plans, and yet also prototypes and pilot factories: in a word, all
that occurs prior to the first uncertain meeting with the user and the judgement
which he will pass. On the other hand is innovation in the strict sense of the word
i.e. the first successful commercial transaction or more generally, the first positive
sanction of the user. Between the two extremes is a fate played out in accordance
with a mysterious script.… A project deemed to be promising by all of the experts
which suddenly flops, while another in which everybody lost faith suddenly
transforms itself into a commercial success. And always the same questions: how
can these unforeseen successes and failures be explained? How to account for
these unexpected turnarounds, these resistances which turn into support or these
enthusiasms which change into scepticism and then into rejection?
(Akrich, Callon, & Latour, 2002)
But the study of the ‘mysterious script’ of innovation has become more coherent, if no less
challenging. As Fagerberg and Verspagen (2009) point out, academia has formalised
‘Innovation Studies’ and, as with any nascent discipline, there is a rather disparate collection
of approaches. Some approaches have coalesced around the methodologies of geography and
policy studies (Gertler, 2003; Gertler & Levitte, 2005; Hussler, 2004; Morgan, 2004); others
have been moulded by the ‘free-wheeling discursive voyages’ into capitalism described by
Joseph Schumpeter (Backhaus, 2003; Garud & Karnoe, 2003). Beyond this, Smits (2002)
notes that innovation is now linked to the emergence of a ‘porous society’ in which
‘knowledge intensive intermediaries’ have a fundamental role as they combine the insights
and abilities of both users and producers. The term ‘ecosystem’ is now applied to innovation,
further emphasising its complexity (see, e.g., New Zealand Institute, 2009). Metcalfe (2007)
usefully distinguishes between innovation ecologies, comprised of those people that are the
‘repositories and generators of new knowledge’, and innovation systems or ‘connections
between the components that ensure the flow of information necessary for innovation to take
place’ (ibid., p. 448). This extended holistic interpretation of innovation has several
antecedents. Wulf (2007) referred to an ‘ecology’ of innovation, comprising ‘interrelated
institutions, laws, regulations, and policies providing an innovation infrastructure that entails
education, research, tax policy, and intellectual property protection, among others.’ Dvir and
Pasher (2004) list a number of attributes to innovation ecology, including the time and space
to muse; a conducive organisational structure (‘flat’, with weak boundaries and a low
emphasis on hierarchy); tolerance of risk; clear strategies and attention to the future;
recognition and incentives; financial capital; human diversity; and conversations – the
‘unifying principle’.
6
The constituent parts of any modern innovation system are now irrevocably spread beyond
national borders. Many of the human resources that undertake innovation are highly mobile
knowledge migrants. Therefore, given the breadth and salience of innovation, we should not
dismiss the possibility of key insights from previously ignored disciplines or indeed from
apparently novel and unrelated areas of investigation. Key (2010) in a recent publication
Obliquity: why our goals are best achieved indirectly, challenges explicit, highly rationalised,
goal setting – to be rich as an individual, to be profitable as a company – which may not be as
successful as approaching such goals in a less direct manner. Among the things that may
indirectly influence innovation, we identify social capital as a vital piece of the innovation
puzzle, certainly present in our TUI case studies but extending throughout the wider networks
of government and private organisations (see also Firkin, 2001; Landry, Amara, & Lamari,
2002; Rutten & Boekema, 2007). There are three components of social capital that have been
described (Putnam, 2000; Svendsen & Sorensen, 2007) and that we have recognised in our
TUI case studies. They are bonding capital, an ‘inward-looking’ trust and support that takes
place within boundaries of exclusivity, such as family ties or ethnic communalism; bridging
capital, the ‘outward-looking’ networks that enable individuals and groups to exchange
tangible and intangible assets with outsiders; and organisational capital, the structures and
practices that simple enable ‘things to be done’.
New Zealand, as with other countries, has articulated goals of productivity, growth,
sustainability and now ‘innovation’ in increasingly explicitly terms and yet as we see,
outcomes have been poor at best and – given the acknowledged importance of such broad
goals – somewhat disquieting. Might it be that innovation is best approached indirectly? Is
there some way that policy can act in a more oblique manner on the ‘unifying principles’ of
innovation to bring about better outcomes?
In line with these recent developments, we see people who use technology with skill, insight
and creative awareness as potent sources of innovation. We outline a conception of their role
in what we term technology users’ innovation in Figure 1.1. To some degree all members of
society are technology users. While TUI may be a remarkable subset of society, only some
cases may become commercially viable, and at this point the ‘back shed’ inventor is an
innovator.
7
Figure 1.1: Positioning technology users as innovators
Society (Technology users)
Technology Users
as Innovators
Innovators
Individual/
Family
problem
solving
Community
Problem
solving
Commercially
viable
Figure 1.1 places technology users within a context that includes the people who form the
social networks of the inventor/innovator (Grabher, Ibert, & Flohr, 2008; von Hippel, 1976,
1988). In these networks can be seen the effects of innovation governance, that is the broad
sweep of policy settings and state or private organisations. The TUI voice is often excluded
from this discourse. Government innovation surveys generally omit businesses employing
fewer than 5 people. 5 We have focused on an interpretation of the relevant networks as sociotechnical phenomenon in that we are concerned with how TUI participate in those networks
that in some way govern their technology innovation efforts. Examining these networks will
provide much needed empirical evidence about innovation success and failure at a time when
greater understanding of innovation is vital to New Zealand’s economy.
1.5
Research objectives
Regarding innovation we ask: what are the socio-technical parameters of the processes which
lead to either the success or failure of technology users who innovate? How do innovations
originate, develop, and diffuse from the actual inventor? In providing answers to these
research questions, we can address an important policy question: how can innovation policy
improve the likelihood of TUI success?
Accordingly, our main research objectives are to:
1. Identify the factors causally implicated in the commercial success or failure
of technology users who innovate;
5
NZ Statistics data is reproduced in Appendices 12 and 13: the smallest analytical unit is businesses employing
6-19 people.
8
2. Document how selective participation in the socio-technical networks
surrounding invention affect innovation outcomes;
3. Extend our understanding of innovation within socio-technical networks by
proposing a revised model of the TUI network;
4. Make policy recommendations relevant to the effective support of TUI in
New Zealand.
1.6
Conclusion
This chapter has introduced the topic of technology users’ innovation and given attention to
current explanations of innovation success, arguing that a full understanding of this type of
innovation requires considering the networks in which it occurs. In demonstrating fsQCA, we
hope to expand the research tools available to Innovation Studies. By surveying each of three
sectors and conducting interviews with key participants, as well as analyses of intellectual
property (IP) and sectoral databases, we score selected TUI cases for their membership in
selected socio-technical networks and identify configurations in their success or failure. The
principal outcome of our approach is an increased understanding of the role of social
networks in innovation, and the utility and competence of particular organisations in New
Zealand’s economic growth. Further, we describe the broad framework of innovation
governance on TUI innovation processes. Chapter 2 describes our methods and Chapter 3
presents our data and analyses before these results are further discussed in two subsequent
chapters.
9
10
Chapter 2
Methods
2.1
Introduction: QCA and innovation studies
While not wishing to disparage works that focus solely or primarily on success stories, the
general reluctance of innovation research to deal with negative cases, that is, the failure of
innovation, limits the insights that can be taken from such research. Further, in-depth studies
often have only a small number of cases to draw on, and large-scale studies ignore the
complexity evident within cases. While using semi-structured interviews across a range of
case studies and key participants, we draw on Qualitative Comparative Analysis (QCA) to
enable the systematic investigation across these. QCA approaches are particularly useful in
studies of small to intermediate sample sizes while still incorporating the rich and insightful
complexities of individual cases (Ragin, 1987; Rihoux & Ragin, 2009). These approaches
pursue causal complexity through the use of set-theoretic methods and accept more than one
configuration to an outcome. Essentially QCA approaches show fundamental relationships
across multiple case studies where disparate data are available. Necessary and/or sufficient
conditions can be identified, and results formatted through Boolean logic which enables the
minimisation of configurations by identifying redundant variables.
We use a particular technique called fuzzy-set QCA (fsQCA) to identify system-wide
configurations of participation in selected networks for both successful and unsuccessful
examples of innovation, as well as fleshing out particular instances of this selective
participation and the often very personal experiences of people which frame pertinent
decisions. Variables are refined through successive analyses as results are referred back to
cases to both utilise and challenge theory as empirical evidence comes from ever greater
familiarity with case studies. Therefore at each stage of fsQCA we must be able to explain our
decisions on the degree to which an innovation belongs to our selected networks and the
criteria by which these decisions are made. The assumption is that individual inventors have
considerable agency over their participation, and non-participation, in the key socio-technical
networks of innovation.
QCA approaches have been used before in studies on innovation, typically focusing on the
macro-level. Rihoux & Ragin (2009) examined organisational innovation by political parties.
Fiss (2008) looked at the organisation of high technology firms, finding different causal
configurations as one moves from average performance to high and very high levels of
organizational performance. We take up this aspect of causal configuration when we come to
discuss innovation success and its various expressions. Valliere, Ni, & Wise (2008)
investigated 40 acquisitions of Canadian and US high-technology firms for the effects of
‘prior relationships’ between buyer and target firm on the purchase price, finding that specific
combinations of prior relationship type are positively associated with higher prices. The
authors note that one way to reduce information asymmetry is the exchange of private
information prior to any proposal: ‘… commitment is enhanced by trust’ (p. 61).
At a smaller scale, Rizova (2007) examined six technology innovation projects for the
‘conjoint and simultaneous’ effects of selected innovation factors. In common with other
researchers, Rizova identifies a significant problem as there are no universally accepted
measures of success and failure. Of relevance to our research, she employed a typology reliant
upon the degree the project met management expectations for 1. actual or potential financial
11
returns; 2. satisfying the technical parameters of the project, and 3. staying within or
exceeding the budget constraints.
In a New Zealand example, Birnie, Martin and Newman (2006) applied QCA to 25
entrepreneurs to investigate a model of ‘alertness’, confirming that successful innovation
stemmed from recognising opportunities which they label ‘economic events’. Spin-off
opportunities were more commonly realised than radically new ventures, and the perception
of uncertainty was a necessary condition of recognising an opportunity.
But none of these uses of QCA utilise the possibilities of fuzzy-set QCA which better models
the real-world experiences of innovators where they variously participate in, for our purposes,
socio-technical networks of innovation. These networks are a complex mix of markets,
regulatory regimes, private firms, sectoral interests, and individual actions that affect
innovation governance in New Zealand. Through familiarising ourselves with both the
theoretical understanding of innovation (articulated by academic, industrial and government
discourses) and the empirical data from our case studies, we identified several factors in
innovation that are considered causal in any success. These results will be presented and
discussed in a following chapter. Before this we consider identification of case studies, the
process of scoring variables, the causal variables implicated in innovation success, and the
outcome of success or failure. Some of the material presented in this chapter could itself be
interpreted as results. However this reflects the nature of QCA approaches and their dialogue
between theory and data (Ragin, 2000).
2.2
Identification and selection of case studies
The first step in QCA, as with most research, is the identification of appropriate case studies.
While several researchers have undertaken extensive case study work on innovation in New
Zealand (e.g., Gilbertson et al., 1995; Gilbertson et al., 1992; Winsley et al., 2001), these
primarily focus on clearly successful innovations. As noted earlier, our focus is on what we
have termed technology users’ innovation (TUI) in the farming, building, and energy sectors.
This focus stemmed from the need to complement existing New Zealand innovation research
with attention to the less well-known TUI form of innovation. The three sectors chosen for
study are important components of the economy and are likely to have both successful and
unsuccessful cases. Our approach is both a valorisation and critique of the Kiwi back shed,
‘number 8 wire’ ingenuity, in seeking to better understand the operation of such innovation.
Finding TUI cases was relatively easy as there are many competitions to encourage and
support inventors, and the media regularly presents cases of innovation. In the farming sector
there are two national and many regional field days, each of which conducts competitions in a
number of innovation categories. For the building sector, the Building Research Association
of New Zealand (BRANZ) provided lists of all applicants for product registration which
includes many building innovations as BRANZ accreditation is a standard criterion to satisfy
councils. Yet in both sectors there are constraints to participation, with entry and exhibition
fees for field days that range to several thousand dollars, and BRANZ operates on a cost
recovery basis that several interviewees argued favoured large companies over small,
disadvantaging the ‘little guy’. Cases of TUI in the energy sector proved more difficult to
identify. Partly this was due to the often very technical nature of energy innovation, certainly
in comparison to the farming and building sectors. Many interviewees mentioned the confused
policy and funding contexts of the energy sector, and noted how a wasteful culture of cheap
energy had perhaps limited the innovation that was perceived as being needed.
12
It is not clear how representative these selected cases were in generating a sample of
innovations by sector. While we have not canvassed all possible TUI cases, we are confident
we have found sufficient cases to develop an understanding of causes of success or failure that
will apply more generally to other cases. For all three sectors, we relied on word-of-mouth,
media reports, internet searches and personal contacts at field days, seminars, and building
sites. These strategies led to an incredible range of innovation, from individual solutions that
were never intended to be commercialised to extensive projects involving highly skilled teams
driven by the need for commercial success in exporting their technology. We will discuss how
these innovations were scored for success in a following section. Appendix 11 lists all the
case studies included in this research and provides a thumbnail sketch of each case; the
interview schedule is given in Appendix 2. At this stage it is important merely to understand
that a TUI case study is a case of invention by a technology user that may or may not be
successfully commercialised as an innovation.
2.3
The process of scoring cases
FsQCA captures two aspects of diversity: differences of kind and differences of degree.
Differences of kind exist where qualitative distinctions can be clearly drawn: cases belong to
one of two distinct sets. For instance, it might be said of an innovation that it is protected by
patent or it is not, i.e., a simple crisp set membership of ‘in’ or ‘out’. However, for many
social science studies can be characterised in terms of differences in degree. For example,
innovations will generally have patent protection, and may be trademarked, protected by
copyright, secrecy, or sheer complexity. The same considerations apply to the outcome of
innovation; we do not dichotomise innovations as outright successes or failures, instead we
can incorporate a range of outcomes based on the empirical expression of each case study of
innovation and theories around the temporal, spatial and hierarchical characteristics of
diffusion. This expression of intellectual property can be interpreted as a ‘continuum of
belonging’, scored through careful attention to the data, including that from our extensive
interviews, as well as theories, policies and practices that affect case studies.
Fuzzy membership scores are a measure of the degree to which case studies belong to
categories, groups or ‘sets’ which are nominated by the researcher to be described and
analysed. As we have argued, it is their selective participation of socio-technical networks that
we seek to score cases. There are several steps in this process. First, researchers must specify
the relevant domain of the assessment, beginning with the set of cases selected or available
for investigation and the resonance these cases have with theory. In this research, we have
identified cases of invention in the farming, building and energy sectors of New Zealand and
analysed the social networks in which they sought to innovate.
Researchers must then designate the degrees of fuzziness relevant to the concepts being
researched. The aim here is not to determine a case’s position on a scale: fuzzy-set scores do
not reflect a simple ranking of cases relative to each other. The degree of membership of, for
instance, ‘financially secure households’ might be more insightful than the comparatively
simplistic measure of ‘household income’.
It is necessary to choose from one of several different types of fuzzy-set that is best for each
concept. Ragin (2000) offers a number of frameworks for the transformation of crisp variables
to fuzzy variables, reproduced in Table 2.1 below. While the crisp-set options are fully in or
out, a simple three-value fuzzy-set logic allows cases to be located between full membership
(‘1’) and full non-membership (‘0’) of a set by adding a third value (‘0.5’). We utilise several
types, including a crisp set, and work through these in greater detail for our selected variables.
13
Table 2.1: Crisp set variables compared to fuzzy-set variables
Crisp set
1 = fully in
3-value fuzzy-set
5-value fuzzy-set
7-value fuzzy-set
1 = fully in
1 = fully in
1 = fully in
0.75 = more in
than out
0.83 = mostly
but not fully in
0.67 = more or
less in
0.5 = neither
fully out nor
fully in
0.5 = cross-over:
neither in nor
out
0.25 = more out
than in
0 = fully out
Numerical
scores indicating
that degree of
membership is
more in than out
(0.5 < x < 1)
0.5 = cross-over:
neither in nor
out
0.5 = crossover:
neither in nor
out
0.33 = more or
less out
Numerical
scores indicating
that degree of
membership is
more out than in
(0 < x < 0.5)
0.17 = mostly
but not fully out
0 = fully out
0 = fully out
‘continuous’
fuzzy-set
1 = fully in
0 = fully out
0 = fully out
Source: Ragin 2000: 156, Table 6.1.
Researchers must then determine the likely range of membership scores. This step emphasises
an important distinction between fuzzy-set analysis and the conventional variable-oriented
approaches. The conceptual midpoint of any fuzzy-set is 0.5, the ‘crossover point’. As a
qualitative anchor, the midpoint is defined by the researcher with a rationale presented for
each breakpoint. 6 These qualitative anchors enable relevant and irrelevant variations to be
distinguished. For example, variation in GNP per capita among the world’s richest nations is
not relevant to membership in the set of rich countries. While New Zealand is often said by
disgruntled commentators to be on the verge of regressing to a Second or even Third World
economy, a cursory examination of income at any level shows New Zealanders still well
ensconced in the First World. However, such commentaries do point to this membership
being less secure than previous periods in our history, a significant factor in the search for
innovation at both the macro- and micro-scales.
Empirical evidence must be identified to allow the appropriate calibration of membership
scores. For some studies, a conventional variable may be used, for example, using GNP per
capita to decide upon a state’s membership of the set of ‘rich’ countries. It might be possible
to utilise several conventional variables to index membership in a single set. However, in
many studies, conventional variables may not be available or useful; the researcher may have
to rely on qualitative evidence and in-depth knowledge of cases, and fit membership to three,
five or seven-value, or continuous fuzzy-sets.
6
In contrast, a conventional variable analysis is anchored by the ‘mean’, “an empirically derived measure of
central tendency”, calibrated according to (sample specific) means and standard deviations (Ragin 2000:169).
Ragin (2008) draws four distinctions between QCA approaches and standard statistical analyses in social
science. First, QCA is a set-theoretic approach. Second, QCA is relies on calibrating data instead of blanket
measurement. Third, QCA accepts configurations of conditions over the independence of variables. Fourth, the
analyses executed under QCA are into causal complexity and not just net affects.
14
Finally, empirical evidence is translated into fuzzy scores. This involves linking raw scores –
GDP, number of patents, manifestations of government support, or other kinds of evidence to verbal labels. These scores are open to reassessment over the course of investigation
acceptance of dialogue between ideas and evidence. While software has simplified both QCA
and fsQCA, the steps outlined above show that putting fsQCA in practice involves
considerable effort on the part of the researcher. 7
Software is not an invitation to methodological monomania: in the warning of experienced
practitioners, the approach works best in conjunction with other methods. Therefore we also
draw heavily on interview data, gathered from over 60 interviews with people who often
provided detailed experiences of working at a high level of expertise in specialist areas.
2.4
Causal variables: the key socio-technical networks in innovation
In the course of reviewing the literature, consulting with colleagues, case study participants,
end-users, and through preliminary fieldwork, we identified many contributing variables.
Ultimately we decided on five key networks as being causally significant in innovation 8:
•
Financial capital;
•
Government support;
•
Intellectual property regimes;
•
Manufacturing;
•
Business activities.
First, each of the five variables will be discussed in turn. In these discussions we will present
insights and comments from our case studies. We will also discuss the outcome of innovation
itself and show how fsQCA’s ability to accept degrees of difference is particularly useful.
Rather than categorise innovations as either successful or unsuccessful – the dichotomous
approach of ‘crisp set’ QCA – we assign membership according to sales, profits, and the
temporal, spatial and hierarchical characteristics of the diffusion of these innovations.
We were regularly challenged by what a case of TUI is actually a case of. Several initial case
studies were ultimately excluded as our understanding of technology users’ innovation
became clearer and they fell outside the more refined definition. Recall that our focus is on
technology users’ as innovators, a term that is intended to encompass the phenomenon of
‘Kiwi ingenuity’ that, on the one hand, lies at the heart of a strong cultural identity held by
New Zealanders, and on the other hand may be constraining in fully contributing to wider
economic development. Many innovators were aligned with the market in a way that
indicated their primary use of the technology was as a commodity for sale, and did not
originate from, or encompass, the (almost banal) utility of the artefact and its use value. This
classification issue posed problems in the energy sector, where an initial 20 case studies were
whittled down to just ten as we refined and applied the criteria of technology users’
7
Free software for QCA and fsQCA approaches is available from http://www.u.arizona.edu/~cragin/fsQCA/software.shtml.
The Comparative methods for the Advancements of Systematic cross-case analysis and Small-n Studies (Compasss) website
http://www.compasss.org/pages/welcome.html provides useful working papers and an extensive bibliographical database.
8
The number of variables possible is in some respects limited by the number of case studies. In QCA, the total possible
logical combinations is defined by 2n, where n = the number of variables. Five variables give 32 logically possible
combinations; six would give 64, an amount that would perhaps pose constraints on counterfactual analyses (that is, in
finding cases that would potentially cover all the logically possible combinations of factors).
15
innovation, although this also suggests TUI is perhaps much less common in the energy
sector. Those cases that were ultimately excluded from our study still contributed to our
understanding of New Zealand’s innovation governance.
2.4.1
Financial capital
Financial capital is the most useful score on the cost of innovating, as well as the most
common measure of its success. The ‘power’ of money to transform an idea into a prototype,
an invention into an innovation, is not disputed; as one interviewee said ‘Really, the only
thing you need to innovate is money!’ Smith (2006, p. 29) in his review of New Zealand ’s
innovation policy framework noted: ‘Innovating is much more than learning or creating
knowledge. It always involves a range of activities related to business that have little to do
with technological capabilities’. Financial capital is perhaps the epitome of this statement and,
significantly for our results, we found most case studies used their own income, savings and
credit facilities. Venture capital and angel investors were used by some but were not common
among our case studies; the small-scale and often possessive and self-directed nature of the
TUI cases we examine are not characteristics that appeal to venture capitalists (Hellman &
Puri, 2002) However, these characteristics do not mitigate the need for finance and in fact
emphasise the role of social capital in securing financial capital for innovation.
As raw data, capital is recorded as a dollar value and is easily amenable to calibration as a
continuous fuzzy-set. While software simplifies the operation of converting raw scores to
fuzzy scores, the challenge for the researcher is to identify the three ‘qualitative anchors’ to
the sets: full membership, full non-membership, and the cross-over point (0.5) where a case is
neither in nor out of a nominated set. Table 2.2 below sets out the raw data for financial
capital, their frequency, and shows where we have placed the three qualitative anchors of
membership. fsQCA software works from these breakpoints to generate fuzzy scores which
describe the degree of membership of each datum. Note that these fuzzy-set membership
scores are not simply a ranking of cases relative to each other; scores are calibrated to indicate
their degree of membership in a defined set, in this case the set of innovations funded by
private financial capital.
16
Table 2.2: Fuzzy-set scoring for financial support (capital)
Capital ($)
0
500
1,000
2,000
5,000
7,500
10,000
20,000
25,000
40,000
50,000
70,000
80,000
100,000
150,000
200,000
250,000
350,000
500,000
600,000
650,000
1,000,000
1,500,000
1,600,000
2.4.2
frequency
3
1
2
1
1
Fully ‘out’
3
1
2
Cross-over
1
1
1
8
1
5
2
1
Fully ‘in’
1
1
5
1
1
Fuzzy score
0.02
0.03
0.03
0.03
0.04
0.06
0.14
0.20
0.52
0.55
0.56
0.60
0.67
0.74
0.8
0.88
0.97
0.98
1
1
1
Government support
The drive for innovation is a fundamental feature of contemporary political economics and
some forms of state support for innovation appears universal. As shown earlier in Table 1.1,
New Zealand does not invest a commensurable proportion of GDP to R&D as its OECD
‘neighbours’ but this in itself, while being a characteristic of New Zealand innovation
governance, cannot explain the level of innovation in New Zealand. There are in fact a wide
range of government funding and other support programmes for innovation. Government
financial support for our case studies originates from one or more of the programmes collated
in Williams (2008; see Appendix 1) with cases securing from $5,000 to several hundred
thousand dollars. Support is also offered through government organisations such as business
mentors and innovation ‘incubators’, as well as accessing university students, government
employees and/or research facilities, sometimes on an informal basis. Where present, this
form of support has been incorporated into the scoring of case study support by government
for each case study.
17
A majority of our cases (26 in total of 43) received no support by government, either through
ignorance of what support was available or a deliberate decision not to seek support. Others
abandoned efforts to apply for government support due to the complexities and costs in time
of the applications process. As one person said:
You have to have a degree just to figure out how to fill out the form!
There were disparate types of support recorded: financial, pastoral, professional advice and/or
training, or facilitation. Because of the often crucial role of this support, regardless of its
extent or size, we decided on a crisp-set scoring to interpret government support.
Table 2.3: Crisp-set scoring for Government support (Govt)
2.4.3
No govt. support
Any type of govt. support
0
1
Intellectual property
Legal rights to IP feature in most government and corporate conceptions of innovation
governance 9. What struck us from the outset of fieldwork was the disdain which some of our
informants held for IP in general and patents and lawyers in particular. This attitude was not
necessarily one of ignorance as several of these interviewees owned previous, often very
lucrative, IP and most innovators will own copyright to relevant aspects of their work.
Yet as many people noted, possession of a patent does not preclude the use or
commercialisation of an innovation by others, albeit illegally. Thus while IP is dependent on a
macro-social recognition of exclusion, it is determined at the micro-level by the decision to
pursue or ignore enforcing these rights and is contingent upon costs, including time and effort.
These insights disqualify the scoring of IP as a crisp variable: zero for no IP and 1 for IP
‘protection’. As our data accumulated, a more nuanced approach was seen as better describing
the IP context of case studies. Using interviews, the internet and the various IP databases,
particularly the Intellectual Property Office of New Zealand (IPONZ) it was possible to
collate the IP associated with an innovation (i.e., through its inventor, his/her company, other
businesses, their families and life experiences). We then assigned a score of ‘2’ to each
relevant patent, trademark, copyright or design; and a score of ‘1’ to each of voided or expired
IP (evident in several cases) to reflect both the formal and tacit knowledge the experience lent
to inventors.
We decided that a case study with a total score of more than 7, however that score was made
up, was a full member of the socio-technical network associated with the IP regime. Any case
scoring less than ‘1’ was fully out of this network, and the score of 3 was a point of maximum
ambiguity, where a case would neither in nor out of this set. This value was chosen to reflect
the experiences of case studies where copyright or mere ownership of a patent did not
necessarily provide complete protection. What this fuzzy-set scoring allows us to do is weight
9
New Zealand’s intellectual property regime is governed through the 1953 Patent Act, based on British
legislation dating from 1939. It is currently under review.
18
membership towards those innovations that have a more extensive participation within the
networks of IP.
Table 2.4: Fuzzy-set scoring for IP
Raw IP
score
0
0.5
2
3
4
5
6
7
7.5
8
9
10
11
12
13
16
31
2.4.4
frequenc
Fuzzy
y
score
1
0.02
Fully ‘out’
13
0.26
Cross-over
9
0.66
2
0.79
6
0.88
2
0.94
Fully ‘in’
3
0.97
1
0.99
1
1
1
1
1
1
1
1
1
1
1
1
Manufacturing
The image of the single-minded, even eccentric, inventor toiling in a cluttered workshop
resonates with many people in New Zealand, especially in the rural or farming sector. Most
case studies built their own prototypes and many built the final technological artefact. Several
innovators showed us their first prototype, in one case a series of attempts in different
materials to solve a particular problem. Another case study built – and then gifted to us – a
working scale-model to test a solution for a particular problem raised during an interview.
Most TUI innovators were spoken of as ‘very clever’, ‘very practical’, and ‘good with their
hands’, all standard expressions from ‘Kiwi ingenuity’ mythos but here manifested in
technological artefacts that are variously ascribed as novel, innovative, and potentially
commercial.
The inventor often retained a role in manufacturing, generally through their own firm, but
would also contracted out other aspects due to realities of expertise, scale or productivity.
Where other firms were involved these were often small local engineering firms, although
quite geographically extended networks were also evident. Some innovations such as software
applications or wind turbines are so complex that collaboration or partnership with other firms
was vital, and often large teams were assembled to undertake production.
We have chosen a 6-value fuzzy-set to score the amount of manufacturing an innovator
undertakes or controls. Eight of our cases undertook no manufacturing of their innovation at
19
all, a further nine undertook minor or some manufacturing; 26 cases were considerably,
mostly or entirely manufactured by the innovator.
Table 2.5: 6-value scoring for the amount of manufacturing
an innovator undertakes (Manu)
2.4.5
Freq.
Fuzzy
Score
None
8
0
Minor
5
0.17
Some
4
0.33
Considerable
6
0.67
Most
12
0.83
All
8
1.0
Business activities
What was often mentioned by our interviewees was the utility of other business networks in
which the inventor and his or her supporters participated, a finding that mirrors that of other
innovation researchers. This insight into innovators’ business activities led us to incorporate
these activities into a crisp variable whereby if an inventor engaged in businesses outside of
their immediate technological sphere, then they were judged as having ‘other business
activities’.
Table 2.6: Crisp-set scoring for business activity (Biz)
Inventor has just one
business activity
Inventor has more than
one business activity
0
1
An important extension of this is seen with husband and wife ‘teams’ in which one spouse
(usually the wife of the inventor) has employment in another sector that carries with it other
skills and contacts. Such cases would be scored ‘1’. Overall, 29 of our case studies were
engaged in more than one business activity, comprising around two thirds of all cases.
2.5
The outcome: innovation success or failure (S)
What marks an innovation as a success will be seen as remarkably fuzzy, and not at all the
crisp (i.e., dichotomous) score of ‘yes, successful’, or ‘no, not successful’. Standard macro
political-economic indicators of success are presented as simple to score yet are clearly
extremely difficult to influence. Increased GDP, higher rate of economic growth, more
publications, patents or PhD graduates are typically taken to reflect innovation. Yet in our
case studies inventors themselves reflected a nuanced interpretation of their own success or
failure. All noted their inventions ‘worked’ by solving the particular problem that prompted
20
the attempt in the first place. Yet when confronted with the difficulties of production and
commercialising their invention, many conceded they were not very, or not yet, successful.
Rizova (2007) observes no universally accepted measures of success at the project level
through interviewing laboratory directors who were asked to classify projects as successful or
not based on the degree to which each project met management’s expectations in terms of
actual or potential financial returns, satisfying the technical parameters, and staying within or
exceeding the budget constraints. From this data she ascribed scores of ‘high’ or ‘low’
success. We have accumulated considerable data through a range of case studies, including
people associated throughout the networks of support, yet still acknowledge a difficulty in
categorising such a wide range of innovations into successes or failures.
Our understanding of innovation success has been aided by a number of analytical
perspectives. To better understand the outcome of innovation, we drew on insights into the
temporal, spatial, institutional and social characteristics of diffusion that originated with
innovation diffusion studies dating back to the 1920s. 10 For our study we have ascribed
success according to the degrees of spatial, temporal and hierarchical diffusion achieved by a
case study. Any innovation that was successfully exported was given full membership. This is
in part justified on the grounds that New Zealand government innovation policy is primarily
directed to achieving export success but also from the evidence of case studies actively
seeking export success as a goal. Extensive national sales and distribution was scored 0.8;
regional and/or limited national sales 0.6. Innovations that had some limited success but are
no longer sold or manufactured were scored 0.4; those that only achieved local sales and
diffusion, or very limited national sales, were scored 0.2. Innovations with no sales were
clearly non-members of the set of successful innovations and scored 0. This scoring system is
outlined in Table 2.7. Note that not all inventors were motivated to succeed commercially and
their, admittedly minor, role in our study nevertheless is very useful in understanding
innovation by technology users. We think this particular method of discerning between types
of innovation success is a very useful methodological advance in innovation studies.
Table 2.7: 7-value scoring for innovation outcome (Success)
Freq.
Fuzzy Score
Failure
3
0
Partial Success
9
0.2
Some Success
1
0.4
Neither success nor a failure
3
0.5
Limited national sales
8
0.6
Successful domestically
14
0.8
Successful exports
5
1.0
10
The diffusion of innovations has occupied a central position in a number of disciplines at various stages of
their development, notably rural sociology, geography and medical sociology in the 1950s and 60s, and
marketing in the 1980s and 90s (see Rogers, 2005; Rogers & Scott, 1997; Rogers & Shoemaker, 1971).
21
An interesting extension of the debate about innovation success is the role that technological
failure or irrelevance has on innovation failure. It may be that a particular innovation fails
because it is inherently useless, perhaps the result of an obsession of the inventor. 11 At an
early stage of the research, scoring the number of awards won by an innovation was
considered as a variable to counter this challenge although it was soon discovered there were
a plethora of awards and, like IP, an award was no guarantee of success. We accept this
methodological challenge has not been resolved in our current research although we do argue
that the fuzzy-set approach mitigates this issue while still addressing key policy concerns.
2.6
Additional data sources
While the focus of fsQCA is necessarily on cases studies, in order to understand how people
in the case study reacted to people in their social network it is generally necessary to include
other data. To this end, we draw on both qualitative and quantitative data for our analyses
from various databases, media reports, government and industry reports, and statistics.
Importantly we conducted a series of semi-structured interviews with New Zealand inventors
as well as other participants in the innovation networks including IP lawyers, incubator
personnel, and government officials within MED, MoRST, BRANZ, and EECA. The insights
gained from these interviews provide the substantive knowledge on which we can score cases
for our fsQCA.
2.7
Conclusion
This report contributes a new approach to describing and analysing innovation by analysing
cases of invention in New Zealand according to their membership of key socio-technical
networks. In describing cases and outcomes, we combine qualitative and quantitative data and
accept causation will be multi-factorial and that more than one pathway to success will
probably exist.
To summarise, we have investigated selected innovations by technology users in New
Zealand’s farming, building and energy sectors to describe and analyse the various
configurations of memberships in the key socio-technical networks surrounding the invention:
financial capital, government support, IP, manufacturing and other businesses. In scoring and
interpreting these memberships we also drew on other data gathered through interviews,
database searches, interviews with other participants in these specialised networks, and media
sources. Data were often disparate, and included innovators’ life stories, formal education and
training, informal training, attempts at advertising and marketing (including market research),
and their experiences negotiating often complex regulations and regulatory organisations.
Fuzzy-set Qualitative Comparative Analysis of the data based on membership of TUI cases in
the five variables – financial capital, government support, IP, manufacturing, business
activities – and the outcome (innovation success) will enable the identification of particular
combinations of memberships associated with innovation success and failure. The analysis
was extended by using interview data, media reports, and various databases to gain further
insight into the relevant socio-technical networks and their innovation governance.
11
At a workshop on Intellectual Property, IP lawyers said that were approached ‘at least once a year’ from
someone who argued they had invented a perpetual motion machine, and in one interview it was revealed the
inventor was working on just such a machine.
22
Chapter 3
Case Study Results
3.1
Background characteristics of the inventors
Before giving the technical results of fsQCA, we believe it is helpful to present some of the
comments of our interviewees. The majority of interview subjects were the inventors
themselves, most of whom were male aged between 35 and 65. Most interviews were
conducted face-to-face although several were undertaken by telephone. Interviews were semistructured with a list of basic questions (See Appendix 2); more detailed data for each case are
provided in Appendix 11. Most of these innovators were known as highly-skilled practical
people, as well as being independent, often fiercely so.
I’ve never accepted the status quo…that’s been the case since I was a child.
A few friends have given me the confidence to carry on but basically me. I’m
the one that comes up with all the ideas. Like I ask other people how they
think, they just haven’t got a clue, I’m basically the one that puts the whole
thing together.
I guess I’ve always been going in a different direction from the crowd.
I think I am an outsider, I don’t have a great band of friends, the friends that
I do have are just largely great acquaintances. I have a couple of very close
mates but I don’t socialise at all to be honest with you. I am very happy
doing my own thing as an individual. That’s always been me.
My family think I am obsessed. I probably am.
Most inventors were very self-effacing:
‘We’ as in ‘me’. I don’t like saying ‘I’, I’m not a very good on my I’s, not at
all.
Money was often downplayed. One interviewee said “I don’t want to be rich but I would still
like to be comfortable when I retire because I’ve put in a lot of effort”. Another said the
money was the ‘score’, the way you judged success. Another noted how her father, the
inventor, was “pretty Scottish with his money you know, the moths come out when he opens
his wallet”. Family inheritance – of skills, knowledge and capital, was regular factor in these
innovators (almost always a father-son relationship). The pride was obvious if often
understated:
Both my sons have got the same skills and the same involvement in life
and they will make anything and make it work.
23
Several interviewees expressed a sense of isolation:
This might sound terribly selfish, there is no help whatsoever and it’s a really
lonely place because there is nobody that is doing what we are doing and it
took us years of going to the field days to actually meet a few other people
and now we try and support each other a bit. We have got no organization,
no union, no anything and when I go to town or whatever and meet up with
people they have got no idea ….
One person in the building sector gave this interesting response to the question of whether he
was an inventor or a business person:
I hate the term inventor, with a passion…it makes you sound like some goof
you know. If anybody asks me I just tell them something. The words saying I
have invented something has never passed my lips, I just designed this
product.
Several interviews ended with interesting tangents about young people, their schooling, and
the skills and attitudes of young workers.
To build something new, anyway, you have to have a need for it, or see an
opportunity or a possibility, and actually create something from nothing.
And my impression…is that more of the younger ones coming on don’t do
that, don’t think along those lines, don’t do that well in real-world things.
Success was viewed very differently by many inventors. For one, just having a single product
on the shelf was success:
And I’ve done it! Everything else is icing on the cake.
Never had it and I don’t know … It was wonderful when I was accepted by
my wife first of all… that was a feeling of success. It was another feeling of
success when I got through my combined chefs examination in Glasgow, just
a few weeks before we were married, that was elation. And when my patent
was first accepted internationally in Geneva.
The emphasis on the technical aspects of TUI participants often highlighted their lack of skills
in other, subsequent, aspects of innovation such as marketing.
He was so enthusiastic but he didn’t want to do any of the selling or anything
but he liked working it all out.
Many in the building and energy sectors nominated sustainability goals and ethics as being
very important to their innovation attitude. For some it had framed their current working lives
and strategies for work in the future, but they remained grounded in economic viability.
24
The point is for me it’s always an economic proposition. We can’t tax and
fund ourselves into a sustainable future so if we are going to actually deliver
the sustainable future it should pay, and everybody says environmentalism
pays in the long term but the point is it pays in the short term.
We shall return to interview data in Chapter 5. At this point we draw attention to the practical,
self-directed nature of TUIs. These are characteristics we might expect, given their elevation
as quintessential Kiwi male traits - most of our TUIs are men in their 40s, 50s and 60s.
However, recall the discussion of variables in the previous chapter. We know that nine of our
case have invested over half a million dollars, and that despite their professed independence,
many have accessed government help in one form or another. Many also possess some form
of intellectual property around their innovations and have involved others in manufacturing
their product as well as being involved in other businesses. These networks will be revisited
in the concluding chapter. The rest of this chapter presents the fsQCA results.
3.2
fsQCA data
The scores listed below in Table 3.1 enable the fundamental set relationships to be described,
a key step in fsQCA is identifying necessary and/or sufficient causal conditions. When
causation is complex - and that is the situation for most social change and certainly the
situation for any form of innovation - no single cause may be found to be either necessary or
sufficient. Causes will generally only be found to be sufficient, and even then only in
combination with other causes. For each membership in the constructed sets, for example
‘CAPITAL’, there is a corollary non-membership (~X = 1 - X), represented with lower-case,
e.g., ‘capital’.
This table should be read in conjunction with Table 3.2 which displays the truth table that is
derived from these data. Successful case are coloured green, unsuccessful cases are coloured
red, and yellow is used for cases where it is not possible to decide if the cases are successful
or unsuccessful. Orange denotes a configuration which contains both successful and
unsuccessful cases.
25
ip
MANU
manu
BIZ
biz
GOVT
govt
B12
B13
B14
B15
B16
B17
ENERGY
E1
E2
E3
E4
E5
E6
E7
E8
E9
E10
IP
FARMING
F1
F2
F3
F4
F5
F6
F7
F8
F9
F10
F11
F12
F13
F14
F15
F16
BUILDING
B1
B2
B3
B4
B5
B6
B7
B8
B9
B10
B11
capital
Case
CAPIT
AL
Table 3.1: TUI data table of variable scores for all cases
S
0.6
0.02
0.04
0.6
0.03
0.06
0.6
0.03
0.03
0.52
0.88
1
0.02
0.03
0.6
0.14
0.4
0.98
0.96
0.4
0.97
0.94
0.4
0.97
0.97
0.48
0.12
0
0.98
0.97
0.4
0.86
1
0.23
0.66
1
0.23
0.66
0.97
0.23
0.23
0.94
0.23
0.66
0.03
0.23
0.66
0.23
0
0.77
0.34
0
0.77
0.34
0.03
0.77
0.77
0.06
0.77
0.34
0.97
0.77
0.34
0.77
0.83
1
0.67
0.83
1
0.17
0.83
0.33
0.33
0.17
0.83
1
0.67
1
0.83
0.83
0.17
0
0.33
0.17
0
0.83
0.17
0.67
0.67
0.83
0.17
0
0.33
0
0.17
0.17
1
0
0
1
0
1
1
1
0
1
1
1
0
0
1
1
0
1
1
0
1
0
0
0
1
0
0
0
1
1
0
0
1
0
1
0
0
0
0
0
0
1
0
1
0
0
1
1
0
1
0
1
1
1
1
1
1
0
1
0
1
1
0
0
0.8
0
0.6
1
0.2
0.8
1
0.8
0.2
0.6
0.2
0.8
0
0.2
0.8
0.2
0.6
0.8
1
0.67
1
0.06
0.56
0.6
1
0.74
0.4
0.2
0
0.33
0
0.94
0.44
0.4
0
0.26
0.97
0.79
0.94
0.66
1
0.23
0.03
0.88
0.88
0.88
0.03
0.21
0.06
0.34
0
0.77
0.97
0.12
0.12
0.12
0.67
0.17
0
0.83
0
1
0.83
0
0.83
0
0.33
0.83
1
0.17
1
0
0.17
1
0.17
1
1
0
1
1
1
0
1
1
1
0
0
1
0
0
0
1
0
0
0
1
0
1
0
1
1
1
0
0
0
0
1
0
1
0
0
0
1
1
1
1
0.8
0.8
0.5
0.6
1
0.6
0.2
0.4
0.8
0.6
0.8
0.97
0.74
0.06
0.74
1
1
0.2
0.03
0.26
0.94
0.26
0
0
0.88
0.66
0.99
0.23
1
0.97
0.66
0.12
0.34
0.01
0.77
0
0.03
0.34
0.33
1
0
0.33
0
0.67
0.83
0.67
0
1
0.67
1
0.33
0.17
0
1
1
0
1
1
1
1
0
0
1
0
0
0
0
0
1
0
0
1
1
1
1
0
1
1
0
0
0.6
0.8
0.8
0.2
0.8
0.8
0.5
0.55
0.74
1
0.2
0.6
0.2
0.98
0.02
0.6
0.74
0.45
0.26
0
0.8
0.4
0.8
0.02
0.98
0.4
0.26
0.66
0.98
1
0.66
0.88
0.03
0.66
0.23
0.88
0.79
0.34
0.02
0
0.34
0.12
0.97
0.34
0.77
0.12
0.21
0.17
0
1
1
0.17
0.67
0.83
0.67
0
0.83
0.83
1
0
0
0.83
0.33
0.17
0.33
1
0.17
1
0
1
0
1
1
1
0
1
1
0
1
0
1
0
0
0
1
0
0
1
0
1
0
0
1
1
0
1
1
0
1
0
1
1
0
0
1
0
0
1
0.8
0.6
0.2
0.6
0.2
0.8
0
1
0.5
26
Overall fsQCA analysis results
3.3
Table 3.2: TUI truth table
0.34 0
0
0
0
0
0
0
0
0.26 0
0
0
0
0
0
0
0.02 0
0
0
0.2
0
0
0
0
0
0
0
0
0
0
0
0.74 0
0
0
1
2
3
4
1
1
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.23 0
0.02 0
0.02 0
0.02 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.17 0
0.12 0
0.12 0
0.6
0.66 0
0
0
0
0
0
0
0
0
0
0
5
0
0
0
0
0
0.17 0
0.2
0
0
0
1
k*ip*M*b*G
2
1
0.21 0
0
0
0
0
0.02 0
0.67 0
0
k*ip*M*B*G
0
0
0
0
0.17 0
0.12 0
0
0
0.02 0
0.33 0
0
0
0
0
0
0.02 0
0
0
0
0
0
0
k*ip*m*B*G
0
0
0
0
0
0
0
0
0
0
0
0.17 0
0.4 0
0
0
0.02 0
0.03 0
0
0
1
9
3
0.79 0.5
0
1
0
0
0.66 0.8
0.03 0.2
0.6
1
K*IP*M*B*G
0
0
0
0
0
2
1
5
1
1
0
0
0
0
0
0
0
0
0
0
0
0
0.33 0
0.67 0
0.23 0
0
0
0
0
0
0
0
0
0
0
0.12 0
0.12 0
0.4
0
0
0
0
0
0
0
0.02 0
0
0
0
0
0
0
K*IP*M*B*g
K*IP*m*b*G
K*IP*M*b*G
1
1
4
1
1
2
1
1
1
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.17 0
0.77 0
0.17 0
0.23 0
0.14 0
0.14 0
0.14 0
0.14 0.2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.17 0
0.34 0
0.17 0
0.4 0
0.17 0
0.34 0
0.17 0
0.6 0.8
0
0
0.77 0
0
0
0.23 0
0
0
0.03 0
0
0
0.03 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.2
0.33 0
0.67 0
0.03 0
0.03 0
0.02 0
0.02 0
0.02 0
0.02 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.34 0
0
0
0.66 0.8
0
0.12 0
0.12 0
0.12 0
0.12 0
0.17 0
0.77 0
0.17 0
0.23 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.06 0
0.06 0
0.48 0
0.17 0
0.06 0
0.06 0
0.52 0
0.17 0.6
0.67 0
0.33 0
0.23 0
0.23 0
0.03 0
0.03 0
0.03 0
0.03 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.2
0.67 0
0.33 0
0.23 0
0.23 0
0.03 0
0.03 0
0.03 0
0.03 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.8
0.03 0
0.03 0
0.17 0
0.4 0
0.03 0
0.03 0
0.17 0
0.6 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0.34 0
0.17 0
0.66 0
0.17 0
0.06 0
0.06 0
0.06 0
0.06 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.8
0.77 0
0
0
0.23 0
0
0
0.03 0
0
0
0.03 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.2
0
0
0
0.17 0
0.4 0
0
0
0
0
0.17 0
0.6 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.33 0
0.34 0
0.33 0
0.66 0
0.04 0
0.04 0
0.04 0
0.04 0
0.6
0.77 0
0
0
0.23 0
0
0
0.02 0
0
0
0.02 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.17 0
0.4 0
0
0
0
0
0.17 0
0.6 0.8
0
0
0
0
0
0
0
0
K*ip*M*B*G
5
2
0.17 0
0.6 0
0
0
0.17 0
0.03 0
0
K*IP*m*B*G
0
K*ip*M*b*G
K*ip*m*B*G
0.21 0
0
0
0
0
0.34 0
0.2 0
0
0
K*ip*m*b*G
k*IP*M*B*G
0.17 0
0.12 0
0
0
0.17 0
0.2 0
0
0
k*IP*m*B*G
0
0
0.26 0
0
0
0
0
0.02 0
0.03 0
0
k*IP*m*b*G
0
k*ip*m*b*G
0
K*IP*M*b*g
0
K*IP*m*B*g
0
0.2
1
0.6
0
0.8
0.17 1
K*IP*m*b*g
0
0
0
0
0
0
0.55 0
K*ip*M*B*g
0
0
0
0
0
0
0.17 0
K*ip*M*b*g
0
0
0
0
0
0
0.34 0
K*ip*m*B*g
0
0
0
0
0
0
0.17 0
K*ip*m*b*g
0
0
0
0
0
0
0.45 0
k*IP*M*B*g
0
0
0
0
0
0
0.17 0
k*IP*M*b*g
0
0
0
0
0
0
0.34 0
k*IP*m*B*g
0
k*IP*m*b*g
0
1
2
3
0
0
0
0
0.17 0
0.34 0
0.17 0
0.66 0.5
0
0
0
0
0.03 0
0.03 0
0.33 0
0.67 0.8
0
0
0
0
0
0
0
0
0
0
0
0.8
0
0
0
0
0
0
0
0
0
0
0
0.2
0.26 0
0
0
0.01 0
0
0
0.74 0
0
0.8
0
0
0
0
0
0
0
0
0
0
0
0.8
0
0
0
0
0
0
0
0
0
0
0
0.6
0
0
0
0
0
0
0
0
0
0
0
0.6
0
0
0
0
0
0
0
0
0
0
0
0.8
0
0
0
0
0
0
0
0
0
0
0
0.4
0
0
0
0
0
0
0
0
0
0
0
0.2
0
0.23 0
0
0
0.06 0
0
0
0.06 0
0.6
0
0
0
0
0
0
0
0
1
0
0
1
0.17 0
0.33 0
0.17 0
0.34 0
0.17 0
0.66 0.6
0
0
0
0
0
0
0
0
0
0
0.5
0.17 0
0.21 0
0.17 0
0.79 0
0.17 0
0.8
0
0
0
0
0
0
0
0
0
0.8
k*ip*M*B*g
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.01 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.77 0
0
0
0
0
0
0.17 0
0.33 0
0
0
0
0.17 0
0.2
0
0
k*ip*M*b*g
1
1
2
3
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.26 0
0
0
0
0
0
0
0.74 0
0
0
0.67 0
0.33 0
0.23 0
0.23 0
0.06 0
0.06 0
0.06 0
0.06 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.03 0
0
0
0.03 0
0
0
0.34 0
0
0
0.66 0
0.12 0
0.12 0
0.2 0
0.2 0
0.12 0
0.12 0
0.67 0
0.33 0
0
0.12 0
0
0
0.26 0
0
0
0.12 0
0
0
0.74 0
0
0
0
0
0
0
0
0
0
0
0
0
0.12 0
0.12 0
0.17 0
0.83 0
0
0.12 0
0
0
0.4 0
0
0
0.12 0
0
0
0.6 0
0
0
0
0.17 0
0.44 0
0.03 0
0.03 0
0.17 0
0.56 0
0.03 0
0.03 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.06 0
0
0
0.94 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.2
0
0.03 0
0.03 0
0.33 0
0.4 0
0.03 0
0.03 0
0.33 0
0.6 0
k*ip*m*B*g
k*IP*M*b*G
S
N
n
n
n
E
E
E
E
E
E
E
E
E
E
E
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
F
C
T
27
k*ip*m*b*g
From the data table (Table 3.1) we construct a ‘truth table’ in which each case’s membership
in all possible logical combinations of variables is displayed (Table 3.2). With the five
variables we have chosen, 32 logical combinations exists. What follows is a number of
iterations of the causal configurations associated with technology users’ innovation. The
overall results for both success and failure are presented first. Details of the full fsQCA
workings are given in the Appendices. As a reminder to how to read these results, note the
following definitions:
CAPITAL
capital
GOVT
govt
IP
ip
MANU
manu
BIZ
biz
3.3.1
well financed
poorly financed
supported by government
not supported by government
protected IP
unprotected IP
inventor undertakes considerable, most, or all of the manufacturing
inventor undertakes none, minor, or some of the manufacturing
the inventor engages in other business activities
the inventor does not engage in other business activities.
Pathways to success
The overall truth table in Table 3.2 clearly shows the successful and unsuccessful cases
(coloured green and red respectively). In all there were 27 cases of success and three cases
scored at 0.5 (allocated to cases that it was not yet possible to decide on their success or
failure; coloured yellow). Of the successful cases, 22 were represented by just four
configurations, and a further five configurations of success with single examples. We found
12 cases of failure across five configurations, and one configuration represented by a single
example giving 13 cases of failure in total. One configuration (shown in orange) had two
successful, one failed, and one ‘cross-over’ case (not fully in nor fully out and is scored at
0.5).
There are two steps in the analysis. First we start with configurations present in the truth table.
Then we introduce results derived through the fsQCA software. We initially focus on
successful configurations for which there were multiple cases and omit those with single
examples and the one ‘pathway’ that showed both success and failure. The most common
configuration of success was:
CAPITAL*GOVT*BIZ*MANU*IP (n=9)
In plain language, a successful innovation was well supported financially, supported in some
way by government, with the inventor engaged in other business activities and undertaking
considerable manufacturing of the innovation, while also holding relevant IP protection. In
effect, these inventors achieved innovation success because they were effectively participating
in all the key networks surrounding them and their invention.
This result might seem obvious, merely confirming what seems common sense and what other
studies have explicitly or implicitly found. However, two other significant configurations
were:
28
CAPITAL*GOVT*BIZ*manu*IP (n=5) and
CAPITAL*govt*BIZ*MANU*IP (n=5)
These configurations differ from the first by, in the second configuration, the absence of
manufacturing (i.e., the inventor undertakes none, minor or some of the manufacturing) and in
the third by the absence of government support.
But these results do not make use of QCA Boolean logic which allows terms to be minimised
by excluding so-called redundant factors. So for the two solutions above, we can see that the
term CAPITAL*BIZ*IP covers the common factors of both configurations while being
logically simpler.
One other configuration is also worth noting:
CAPITAL*govt*biz*manu*IP (n=3)
In plain language again, three successful innovations were characterised by being well
financed but not supported by government, with the inventor not engaged in other business
activities and not undertaking significant manufacturing of the innovation, though still having
relevant IP.
Turning now to the software results we consider the minimisation processes alluded to above,
which enables three types of solutions to be derived - complex, parsimonious, and
intermediate - based on different treatments of ‘remainders’, those combinations for which
there is no empirical evidence. For complex solutions, all remainders are treated as ‘false’,
i.e., do not demonstrate the outcome. The parsimonious approach sees the utilisation of any
remainder that will help generate a logically simpler solution, regardless of whether it
constitutes an ‘easy’ or a ‘difficult’ counterfactual case. The intermediate approach
incorporates only those remainders that are ‘easy’ counterfactual cases into the solution. The
designation of ‘easy’ versus ‘difficult’ is based on insights the researcher has on substantive
and theoretical connections between causal conditions and outcomes. Our assumptions –
arrived at through our interviews and the empirical evidence of our final 43 case studies as
well as a further 12 cases not included – are that financial support, government support, and
business connections should contribute to successful innovation. ‘Easy’ counterfactuals
assume that adding a superfluous variable to a configuration known to result in the outcome
would still produce the outcome. ‘Difficult’ counterfactuals attempt to remove a variable from
a configuration that displays the outcome on the assumption that this variable is redundant
and the simplified configuration would still produce the outcome (see Ragin & Sonnett,
2004).
Therefore we present software minimisation results, thus drawing attention to the key
configurations common to success and failure. In what follows, raw coverage refers to the
proportion of the outcome explained by each term of the solution. Unique coverage measures
the proportion of the outcome explained solely by each individual solution. Consistency is a
measure of the degree to each solution term is a subset of the outcome. Solution coverage
measures the proportion of the outcome explained by the complete solution. Solution
consistency measures the degree to which the solution terms are consistent with being a
subset of the outcome.
29
All these technical terms can be seen and better appreciated with our first presentation of
fsQCA results. Analysing successful TUI cases across all three sectors, excluding single
examples, and derived through the intermediate approach, show two key configurations: 12
raw
unique
coverage coverage consistency
CAPITAL*manu*IP 0.451822 0.115790 0.926141
CAPITAL*BIZ*IP
0.604049 0.268016 0.893413
solution coverage: 0.719838
solution consistency: 0.897527
In plain language these results show that technology users who are:
•
Well financed, not undertaking significant manufacturing, and holding relevant IP;
or,
•
Well financed, engaged in other businesses, and again with relevant IP.
...are more likely to succeed. In the terminology of fsQCA, the first solution ‘covers’ or
explains 45 per cent of the outcomes, about 12 per cent of which are only covered by this
term, which is 93 per cent consistent with the outcome. The second solution covers 60 per
cent of the outcome, 27 per cent of which is only covered by this term, and it is nearly 90 per
cent consistent with the outcome. Together the two ‘solutions’ cover 72 per cent of the
outcome and are about 90 per cent consistent with that outcome.
However, as Table 3.2 shows, we actually have considerable complexity in the results. The
five successful configurations with single examples are not given emphasis in these results in
order to focus on the configurations with firmer empirical evidence, rather than on those that
might be somewhat idiosyncratic (see Appendix 3). These individual configurations are,
however, incorporated in the results given in full in the appendices. Note that two of these
configurations (cases F8 and B6) show the lack of IP, which, given the varied and interesting
experiences discussed by our TUI cases in their dealings with IP networks, mean we do not
ascribe causal power to IP in and of itself.
Overall, these results remind us that an inventor may still achieve success by configurations
other than the ones we have emphasised. We will bring the complexity back into our results in
a following section and at this point simply draw attention to the strongest configurations of
success.
3.3.2
Pathways to failure
The main configuration of failure was:
capital*govt*biz*MANU*ip (n=5)
Failed innovations were generally unsupported by financial capital or government, with the
inventor not engaged in other business activities and lacking relevant IP protection but
undertaking most of the manufacturing. It should be noted that this configuration describes
the archetypal Kiwi ‘back shed’ inventor: good at making, and then ‘tinkering’ with an
12
Several operational details are also given through the software application, namely in this example a frequency
cutoff of 2 and a consistency cutoff of 0.872781; and the ‘assumptions’ for treating remainders, in this case that
the presence of CAPITAL, GOVT and BIZ contribute to the outcome.
30
invention, but giving disproportionate attention to this part of the process at the expense of
other necessary aspects.
We also present the software results for failure, again excluding single examples:
raw
coverage
capital* govt*biz*ip
0.338251
CAPITAL*govt*BIZ*MANU*ip 0.103279
capital*GOVT*BIZ*MANU*ip 0.123497
unique
coverage consistency
0.338251 1.000000
0.103279 0.917476
0.123497 0.879377
solution coverage: 0.565027
solution consistency: 0.955638
Again, using the terminology of fsQCA, the first configuration covers 34 per cent of the
outcome and is 100 per cent consistent with that outcome. However, note the low coverage of
this solution. The remaining two terms have less explanatory power (and are less consistent),
confirming what we have found through our interviews. These are important results as they
show that failure is not solely a case of the inventor shutting themselves in their workshop.
Recall that we define success of an innovation according to the characteristics of its diffusion.
It was not possible to judge an innovation on its technical ‘competency’, that is, how good a
widget or process was compared to competitors. These results highlight the lack of
participation in those socio-technical networks previously identified as important to
innovation success. However, we also see that innovators who are participating in some of the
key networks, such as financial capital, government support, and other businesses, can still
fail. Appendix 4 presents more detailed data on overall failure.
3.3.3
Comparisons across sectors
In this short section we compare between each of our three sectors. These sectoral results
show some variation in the configurations of success or failure across sectors (Tables 3.3 and
3.4 respectively). While at first glance these tables may seem to indicate very different
configurations, we advise checking these results against the truth table (Table 3.2) which
shows the distribution of cases across relevant configurations. We draw attention to the strong
presence of financial capital for success, the regular appearance of business networks
(especially in farming), and the coupling of government support with innovator-led
manufacturing.
Table 3.3: Comparison between sectors for innovation success
Term
Farming
Building
CAPITAL*BIZ*IP
X
X
GOVT*MANU*IP
BIZ*manu
X
X
GOVT*MANU*ip
X
CAPITAL*manu*IP
X
CAPITAL*GOVT*BIZ*IP
Energy
X
X
31
We found less variation in the pathways to failure, again something which can be verified
from Table 3.2. The absence of financial support in failure is expected in these cases, as is the
inventor undertaking considerable manufacturing. As with the overall results for failure, we
see inventors/innovators not participating significantly in the socio-technical networks found
to be relevant for innovation in New Zealand. Appendices 5 to 10 include the detailed results
for success and failure in each of the sectors.
Table 3.4: Comparison between sectors for innovation failure
Term
capital*MANU*ip*
govt*MANU*ip*
capital*govt*biz*ip
capital*govt*MANU*biz
3.4
Farming
X
X
X
Building
Energy
X
X
X
X
Conclusion
This chapter has presented the results of a fuzzy-set Qualitative Comparative Analysis of
technology users’ innovation and found a number of different configurations to their success
and failure. The most powerful configurations of success was to be well financed, not
undertaking significant manufacturing, with relevant IP; or well financed, engaged in other
businesses, again with relevant IP. Relevant IP protection emerges as a regular feature of
success, achieved through an innovators research, networking and collaboration and often
spoken of in terms of achievement and professionalism.
The most common feature of the failure of TUI cases was their lack of membership in the
networks of finance, government, IP and other businesses, yet often with strong membership
in manufacturing. These configurations describe the iconic image of the Kiwi back
shed/number 8 wire inventor. The configurations of success speak of the ability of TUI cases
to negotiate the complexities of finance, government and regional authorities, intellectual
property law, other business activities and – their strength and often the original entree to
technological innovation – manufacturing. We will return to discussion of these
configurations in the final chapter but will first discuss these configurations and sociotechnical networks in greater depth.
32
Chapter 4
The Context of Innovation
4.1
Introduction: TUI networks and nodes
Fuzzy-set QCA has provided a way to compare across multiple cases of innovation according
to their varying participation in socio-technical networks. Pathways in their success or failure
are configurational, that is, more than one factor is involved, and overall more than one
configuration will exist to both success and failure although we have been able to reduce these
two key configurations. This chapter broadens the focus from the core results and considers
the context of the cases, that is, the networks themselves and the key nodes within them.
An important influence on this context is New Zealand’s innovation governance. Innovation
governance refers to the broader institutional context of innovation, comprising the networks
of policy, finance, support, mentoring and so on. As noted in the introduction, successive
New Zealand governments have attempted to improve the country’s relative economic wealth
through a variety of strategies with a focus on research, science and technology as a means to
innovate within the domestic economy (Ministry of Research, 2008; MoRST, 2008; OECD,
2007; Williams et al., 2008). Summarised in Appendix 1, these policies sustain formal
networks which are supplemented by informal networks that coalesce around technologies
and what could be termed ‘communities of practice’. In effect, these are the means by which
innovation governance affects innovation.
This chapter brings the configurations shown by technology users’, who are historically and
culturally important in innovation in New Zealand, into the broader context of New Zealand’s
innovation governance. So in reviewing the context of successful innovation we can assess
how well this innovation governance is supporting TUI innovations. This will prepare the way
for discussions of what our results suggest are the important implications for innovation
policy.
4.2
The context of innovation for each key variable
The following sub-sections discuss each of our five variables in ways that show them as part
of the socio-technical networks in which TUI cases variously participate.
4.2.1
Capital
As noted in the discussion of capital as a variable, while money is both a useful ‘score’ on the
cost and success of innovation, many TUIs challenged this aspect. The ‘power’ of money to
transform an idea into a prototype, an invention into an innovation, is not disputed. Most case
studies used their own income whether savings or credit, including second mortgages.
Venture capital and angel investors were not common among our case studies, with most
cases struggling to achieve the necessary levels of trust with possible financial backers. As
one inventor said:
Economics, that’s everything. If you can’t match the price then forget it…
33
Our case studies showed a spread of capital investment ranging from near zero to $1,600,000.
Most were self-financed through family firms and farms, emphasising the role that family
networks play in this type of innovation, a ‘leverage’ we consider founded on the significant
role of bonding social capital in TUI. This feature is echoed through bridging social capital
manifested as support from key people who acted, sometimes informally, to support
innovators and their products, especially where merit was seen in the technical utility or
contribution to sustainability.
4.2.2
Government support
A regular experience for TUI cases was the difficulty in accessing government help, with
several cases claiming there was no help available despite many programmes and initiatives
existing. Other innovators reported mixed experiences with regional mentoring programmes
and government agencies:
…the first thing that happened was he said funding, we can get you some
funding for this and that will pay for my time. And I thought ‘oh you
bastard’. And to me the whole thing is insider! There are consultants there
which are creaming it off the Government funding and he said the most I
could probably get you is $5000 and I thought it’s a joke and of that he was
taking $3000 for his advice and at the end of the day he has never sent me an
invoice and he doesn’t ring me anymore. And I don’t ring him.
…the environment has to be free enough so people can still think and if they
get bogged down with paper work and bullshit then the thinking is going to
go out the door.
Men in suits! I should mention the number of discussions I’ve had with people
offering me expensive advice which is not useful, which consists of a lot of
buzz-words but which doesn’t touch ground on your particular product.
But it’s a lottery in terms of the caliber of what you get, and there are an
awful lot of people out there prepared to give you advice which isn’t really
relevant but charge a great deal of money for it. It’s a minefield, it really,
really, really is.
Some inventors could not negotiate the overly complex funding application processes and,
valuing their time as a resource that would better serve other tasks – not least the hands-on
tinkering that is often their passion – abandoned attempts to garner government funding.
Others heard of personal experiences that framed their own approach to seeking funding:
…he said [a FRST application] took weeks and weeks trying to get everything
together, so that really just put me off.
We were aware that several of our case studies had negative experiences of school, and
discussed these experiences in terms that might nowadays be subject to so-called special
needs services (e.g., dyslexia). If we accept that a significant number of New Zealanders
34
suffer from literacy problems, 13 then we would expect that TUIs might be disadvantaged in
accessing government and corporate support that requires a very high degree of literacy.
It should be noted that several TUI cases gained invaluable support from employees of
government organisations and universities on an informal basis. This was described in terms
similar to participation in a ‘community of practice’ (see Fox, 2000; Wenger, 1998) in which
individuals were personally committed to, for example, a more sustainable future and gave
their time and skills to projects that satisfied these beliefs. This feature of socio-technical
networks reinforces the role of trust and reciprocity many TUI seek and support.
4.2.3
Intellectual property
IP was a controversial topic for many inventors, although most successful cases had
undertaken IP protection, usually through a specialist law firm. Distinctions between sectors
are apparent, with patents and trademarks less evident in the farming sector and a constant in
the energy case studies.
New Zealand’s intellectual property legislation was being reviewed at the time of this
research. IP, as a variable in our analyses, occurs regularly in successful cases – and its
absence is noted in failures – but this is an outcome of networking and learning. The more
experienced innovators were often strongly proactive in IP negotiations.
I’ve locked up all my intellectual property under my own name. And that’s
the only thing that has kept me alive. Because if I had bolted it into the
company we would have gone down the tubes because the next guy, he
wanted to dick me over and steal my IP
While some cases were upset by negative experiences, primarily through bad advice (sought
through non-specialist lawyers), several cases undertook much of the work with relative ease:
We have taken our own out. [My wife] has actually done it on the net herself.
The Intellectual Property Office of New Zealand sends out an information
pack, and I thought, well I can write English, so I set out to patent it myself.
And got turned down twice, and after the second time I rang them up and
said, I don’t want to waste anybody’s time, I haven’t done this before, should
I just flag it away, and hit one particular individual down there who said, no,
no, we think it’s the best things we’ve seen for ages. We can’t tell you this but
we’re going to give you a patent. But take it to a patent attorney to draft the
claims, it’s in your interest. So I did, and she cost me about $1K, and was
wonderfully competent.
Others ignored it, one interviewee adhering to Creative Commons principles in making freely
available material they published. Others preferred to be quick to market or chose to focus on
further technical development:
13
Chapman, Tunmer, & Allen (2003) found that 7.7 per cent of New Zealand adults self-reported as having a
learning disability, with a ratio of males to females of 3:2. Overall, between 40 per cent and 50 per cent of New
Zealand adults lack “the minimum level of proficiency required for meeting the complex demands of everyday
life in knowledge-based societies”.
35
…we are not big on patents. Most of the products that we produce are small,
low-value items and we believe in [being] the first to market, push them out
and take what you can at the beginning of the process rather than the cost of
a patent.
Do I put $80,000 into development or to put $80,000 into a patent. It wasn’t
a hard decision in the end but I think the thing is you have to protect yourself
from the patent system to a certain extent.
Three of our case studies were aware of ‘rip offs’. Two were in farming and were being
copied in Australia, a country with which New Zealand has strong historical ties as well as
increasingly formalised economic relationships and a certain cultural empathy. The cost of
legal action was estimated at $80,000 and $100,000, which both cases dismissed as too much.
The third case, a building innovation, was being manufactured and ‘subsequently’ copied,
something the innovator himself did not find remarkable and that he was countering by taking
over more of the manufacturing process while still basing manufacture in China.
While IP features strongly in many of the successful TUI configurations, it was difficult to
assign it causal status. As noted in the discussion on the energy cases, IP was a standard
device to clarify ownership and benefits where collaboration in complex designs and products
was common. In other cases, IP seemed to be an ancillary feature, attached to an innovation
through advice and an acceptance that protecting IP is a part of being a serious innovator. This
was particularly so in the energy sector where most TUIs were engineers trained and
experienced in a sector dominated by large companies and complex projects where securing
and clarifying IP was standard practice. Those cases that dismissed or disparaged IP did not
do so through any ignorance of its function; several owned profitable IP on earlier
innovations. For some it was not necessary in a competitive market where speed was the key
to success, and IP is, of course, no guarantee of exclusivity.
4.2.4
Manufacturing
While most TUI cases built their own prototypes - indeed this is a central characteristic of a
TUI - those cases that persisted in personally undertaking a significant amount of the
manufacturing often failed. While there are cases of TUI success where most of the
manufacturing is ‘in-house’ this is generally within a small firm owned by the innovator who
thus has time and energy for other important innovation tasks.
Those cases that contracted out all or aspects of manufacturing were reliant on a range of
other firms. Sometimes one or two other local firms were engaged for components which the
TUI person than brought together in the final stages of manufacture (e.g., cases F3 and F11).
For simple plastic-extrusion processes, a relatively small firm could be employed. Other times
manufacturing was done entirely by a large firm with specialist machinery and skills (e.g.,
B10, B11).
There are two sorts of suppliers, there are those that say of these guys aren’t
gonna be around for long, this is a risky business, let’s see if we can get as
much as we can out of this one job ‘cos there won’t be anything coming later.
And there’s the other group who say ‘Hmmm, that’s an interesting idea, I
think they’ve got a chance here, we’ll try support them, do what we can for
them, and hopefully it will turn into business in the future.’
36
Several cases had to import specific materials:
I had to import it [from Korea]. You need to be fairly confident with yourself
that you are doing the right thing when you’re importing.”
Unsurprisingly, several innovations were manufactured in China, with the inventors
themselves forging and maintain these cross-border/cross-cultural relationships. One case
arranged the necessary introductions and visits via the internet. Regular trips to China were
taken by several TUI cases to discuss manufacturing issues and, as one person noted:
They really appreciate the personal contact. Most of their customers they’ve
never met.
Quality was generally very good, an issue of perhaps special importance to TUI people given
their strong trade backgrounds and appreciation of good manufacturing.
I have got a very good Chinese engineer, he speaks no English and him and I
just solve problems by just drawing pictures, which is quite unique.
But the issue of overseas manufacturing was sensitive to others. Two building cases refused
to source manufacturing offshore, wanting to ensure jobs and investment in the local
economy:
I get them made in Auckland because I refused to get them made in China, I
wouldn’t do it there I prefer it to be a New Zealander and I would obviously
cut my profit to do that.
Manufacturing is clearly an important consideration in technological innovation. Interestingly,
we found that many TUI cases arranged acceptable manufacturing in China and were happy
with the technical quality and business relationships. This indicates that concerted efforts to
promote New Zealand manufacturing may be somewhat misguided. While we did find
examples of technically simple TUI products, such as moulded plastics, being manufactured
with ease by small specialist firms, for many technically complicated innovations, Chinese
manufacture enabled costs to be kept significantly lower.
A regular observation was that a certain employee or colleague would have exceptional
technical skills and contributed with innovations of their own:
I’ve got a boy out there and he’s bright but he can hardly read or write but
he’s got it up here. And I recognised that as soon as I saw him. He’s like me,
he’s a failure of the school system but he’s bright and he’s got that ability
even now while I am working with him, he can pick things up and he will
make suggestions about how we can improve things even beyond me and I
like that in a person you know.
37
4.2.5
Business activities
This aspect of the socio-technical networks of innovation became apparent at an early stage of
our research, with several successful innovators establishing other businesses in other areas of
interest, including importing and IT services as well as other trades and primary sector
businesses. For some innovators, their other businesses provided an income stream that could
be used to finance their more experimental work with innovation. For others the networks
gave expanded networks of potential support and useful information, not only within the
sector they specialised or originated in but across other sectors and into national and regional
officialdom.
…I’m a carpenter by trade, I was a builder … chucked the building and
worked in the bush, went back to the clear felling and its sort have gone on
into this. But I had tuna fishing as well, built a boat and did that for about 8
years, coming back every weekend and I got out of that when the store got
busy…
Others expressed some regret at not having developed business skills.
It’s unfortunate that I never learnt business skills so the inventions have all
just been done quietly and I just carried on doing my work and never even
thought about promoting it into a business venture
One feature of business revealed by our interviews was the awareness and sensitivity to
ethics. Most cases had experienced what they perceived as incompetency or corruption from
others in the networks in which they were participating.
…these Jaffas bought it, violated his trust and did the dirty on him … so he
said ‘right pay me out or I sink it. I don’t want to have anything to do with
it’, so they were on their own. They ended up cutting the company … It was
going for less than the stock on hand, less than the raw material … [they]
absolutely killed it and somebody else has now got it. It’s just a classic case
of someone that, I mean the [inventor] was dyslexic, he hasn’t got a business
bone in his body, he wouldn’t know how to write or do anything and yet he
could build that amazing business and yet people who supposedly know so
much can kill it within a year.
Many others volunteered instances of dishonesty in their sector, and while it was not possible
to prove or disprove these claims, based on our results we confidently assert that societal trust
and ethical business practices will facilitate the growth of the social capital that underpins,
among other things, TUIs. 14
14
In a recent report, Transparency International (2010) found many of New Zealand’s largest listed businesses
have not achieved fundamental best practice ethics standards. For companies listed on the NZX 50, only 44 per
cent have policies prohibiting bribery. This compares to 72 per cent of the UK top 100 companies (by market
capitalisation), 57 per cent in Europe, and 69 per cent in the US.
38
4.2.6
Miscellaneous issues
Several of our case studies were serial inventors, and came up with new ideas and widgets
almost compulsively. All learnt over time how to better promote their inventions, that is
innovate, although this was no guarantee of success. Our most successful TUI cases were
fully aware of marketing methods and utilised modern technologies and the internet to
promote themselves and their innovations. Although we found no explicit examples of social
networking tools, it is reasonable to expect these successful examples – who are after all wellnetworked – to access such methods. Many farming case studies did not enjoy reliable
internet access, one even having her driveway dug up for a fibre-optic cable which she herself
could not access. Government plans to extend broadband access in New Zealand do not aim
for universal coverage, a policy that will reinforce the isolation of rural TUIs of whatever
sector.
There was a growing awareness of the value in communicating product criteria such as social
and environmental qualities as well as personal, family and firm histories. As one case study
said:
People love a story.
As is frequently the way, many interviews included, and often ended with, broad observations
on tangential issues. Several older interviewees thought their grandchildren did not experience
the technological opportunities, and many had experiences of disregard for their skills and
invitations:
A few years ago we lost our shed in a fire … and I went to [the local] high
school where they have work experience for kids and I asked them if they had
a kid that was interested in going into the engineering trade, because I’ve got
some work that will teach them some of the skills. And I rang the careers
advisor and I never got a reply from them and I was totally disillusioned… I
thought to myself ‘well maybe schools now are spending too much time with
computer and academia rather than teaching basic skills.’
4.3
Conclusion
The five causal conditions we identified and analysed for their role in innovation by
technology users are complex but amenable to fsQCA. Our approach sees each causal
condition as a network in which innovators interact with other participants to varying degrees.
What the interviews show is a continual struggle to participate effectively in these networks
such that their efforts actually promote innovation, even when these networks comprise
organisations and resources dedicated to that outcome.
It seems a truism to say that successful innovation requires capital. Obviously, money is
needed to develop an invention. What is more pertinent is where this capital is sourced. Our
results show that family, often through family farms and firms, provide significant financial
support as well as important moral support, and ancillary skills such as administration,
promotion and marketing. Perhaps this support could be seen as ‘pastoral care’; certainly it is
supported by social capital and a key outcome of our research is highlighting the importance
of bonding, bridging and organisational capitals to innovation.
39
Issues of scale are observed in each sector, particularly with New Zealand being seen as too
small for many innovations in the building or energy sectors to be successful. Farming
innovators, while having a relatively large domestic market, often sought opportunities to sell
in Australia or the Americas, particularly the US. New Zealand’s innovation system is highly
reliant on global links, even at the relatively small-scale of most TUI, and that the sort of
expertise, insight and abilities of TUIs – their technological literacy – is a fundamental
component of New Zealand’s innovation ecology.
Our case studies have revealed remarkably similar experiences whether in farming, building
or energy, including simple mass-produced widgets to large-scale and expensive technical
systems. Difficulties in accessing the necessary resources, including the correct information
and advice, beset all innovators. Many people alluded to different cultural perspectives on
technological innovation, including a rural/urban divide, corporate versus family business
conflict, and trade or industrial practices versus officialdom and bureaucracy. These insights
contributed a great deal to this research, confirmed the usefulness of the innovation ecologies
and systems framework, and have helped frame our recommendations.
40
Chapter 5
Conclusions
5.1
Introduction
The main research objectives of this study were to:
1. Identify the factors causally implicated in the commercial success or failure
of technology users who innovate;
2. Document how selective participation in the socio-technical networks
surrounding invention affect innovation outcomes;
3. Extend our understanding of innovation within socio-technical networks by
proposing a revised model of the TUI network;
4. Make policy recommendations relevant to the effective support of TUI in
New Zealand.
A number of cases in the building, farming and energy sectors were identified and studied in
detail. The fsQCA method was used to analyse case studies of invention according to their
memberships of various networks to identify the configurations by which their success or
failure is determined. This method combined both qualitative and quantitative methods, and
accepts that more than one configuration to innovation success may exist.
Results show that innovation success was most likely when inventors were:
•
Well financed, not undertaking significant manufacturing, and holding
relevant IP; or,
•
Well financed, engaged in other businesses, again with relevant IP.
The most common configurations leading to innovation failure were when innovators were:
•
Poorly financed, lacking government support, not engaged in other business
activities, lacking IP; or,
•
Well financed, lacking government support, engaged in other businesses,
undertaking significant manufacturing, and lacking IP.
This chapter begins by considering the implications for theory. It then considers the
implications for policy.
5.2
Core results and their implications for theory
Our results show that successful technology users’ innovation requires that inventors manage
effectively the wide range of factors surrounding them and their technology. These factors,
and the connections between the factors, form a network. Inventors give variable attention to
these network connections. Our first TUI model, presented earlier as Figure 1.1, can be
41
improved by including all the observed elements in the network, as shown in Figure 5.1. The
figure shows a wide range of key actors (research, design/evaluation/production, society,
consumers, regulators, design, and industry organisations) on the periphery of the diagram.
These people may not be closely linked to the inventor however they are all interacting with
the technology user who mediates between them and the technology. Closer to the centre of
the model are the five key factors we have identified as being causally implicated in
innovation success (capital, business, government, manufacturing and IP). In addition, the
model includes the invention itself, the inventor, and family/peers. Note the lack of causal
connections represented by arrows is deliberate and designed to reduce confusion as the
model includes many interconnections.
Figure 5.1: Model of the TUI network
Design/Evaluation/
Production
Research
Family/Peers
Financial
capital
Technology UserInventor
IP
Invention
Government
Business
Manufacturing
Society
Regulators
Consumers
Industry
organisations
Our broad positioning of TUI within society in Figure 1.1 can now be better described
through Figure 5.1 above. The model does not explicitly display all of the pathways to
successful or unsuccessful innovation as shown by the fsQCA results. In large part this is due
to the nature of the results themselves: there is no single pathway to success. So the figure
works best by not showing precise pathways but by showing the nature of the network in
which the inventor is located. This network has a number of key factors with the most
frequent configuration of success involving effectively interacting the five socio-technical
networks (capital, government, business, manufacturing and IP). The other success
configurations include some but not all of these other factors.
Successful innovation is the product of both individual inventive ability and the ability to
manage the factors – the innovation network – within which the invention is developed into
an innovation. The results indicate that innovation success is more likely when more of the
42
key factors are given attention. The configurations to failure show that invention by itself is
not enough.
While the inventor is the key node of the TUI network - the inventor could be said to
‘surround’ the invention - this dyad does not exist as an innovation without considerable
interaction with other nodes. Successful innovation requires the release of this often intensely
personal technology so that others may benefit from it. This shows what the key challenge of
TUI is: nurture the invention and negotiate for its release so that others want to purchase it. In
some cases, new inventions are kept firmly locked within the personal network of the
inventor, while in other cases insufficient attention is given to the connections needed to
ensure commercial success. The model includes a broad cast of key actors and highlights the
potential complexity of the TUI network within which the innovator has to operate.
The model prominently displays the family and peers of the inventor acknowledging the vital
role that this plays in successful innovation. This family role is an example of bonding social
capital. Of particular importance here is the role of the inventor’s spouse. It is well known in
farming circles that farm ventures are generally a partnership between husband and wife. In
our TUI farming cases, we saw this regularly, commonly with a husband as inventor and wife
as ‘administrator’, and parallels occurred in the other sectors. Administration includes such
diverse activities as publicity, website management, meeting with possible collaborators and
supporters, and attending mentoring and other programmes. Configurations of innovation
success in the farming sector include the presence of business activities. Instead of the classic
image of a farming couple squirreling away in the backblocks of rural New Zealand, what we
see in successful cases is a well-connected partnership accessing information, support, and
capital, often through other business ventures.
In effect, the inventor’s social capital plays an important role in mediating the key
connections between many of the factors shown in Figure 5.1, whether it is bonding and
bridging through family, friends and peers, or wider organisational capital in the
performances of other participants in New Zealand’s innovation system. The model could be
further improved by greater articulation of the dynamics of this social capital and the issues of
scale which are important considerations in all sectors. The pathways of success we have
observed speak of TUI cases negotiating the complexities of finance, government and
regional authorities, intellectual property law, other business activities and – their strength and
often the original entree to technological innovation – manufacturing, through the enabling
effects of networks of trust, support and respect.
Our results emphasise management of the key factors in the socio-technical networks
surrounding invention. This emphasis suggests that the concept of innovation ecologies
proposed by Metcalf (2007) has merit. Further conceptual work in this area is needed.
5.3
Core results and their implications for policy
The configurations of success we have identified and discussed could serve as a template by
which to judge inventors who may seek increased support, indeed government and private
capital undoubtedly have similar models in mind. When asked for policy changes that might
assist them in their innovation efforts, many TUIs offered few alternatives, some recoiling
from an approach of government ‘picking winners’ and preferring government to have as little
involvement as possible. Most wanted less bureaucracy, hardly a unique request and one that
the current government could not be accused of ignoring. However, one fundamental theme
from the outset of our research, and highlighted in our fsQCA results, is the importance of
43
financial support. While many case studies sourced personal or family funds for their
innovation, most still sought – and would obviously benefit from – further funds through
banks, starter funds, government, angel investors and venture capitalists. Other reports have
already noted both the importance of financial capital and its relative paucity in New Zealand
(Capital Markets Development Taskforce, 2009). Assertions that capital funding for
innovation in New Zealand has been increased needs to be interpreted as not being equally
available to all inventors because of the difficulties some have in accessing it. While our
research coincided with a serious and extensive financial crisis, the sine qua non of innovation
is financial capital: reducing or eliminating support for innovation in the face of recession can
only be counterproductive.
Recommendation 1: That the government investigate opportunities to provide TUIs with
financial support. This may include collaboration with the private sector.
Another theme in these results is IP. We know from our case studies that IP protection is now
commonly sought as a need for clarity of ownership, assurance to collaborators, and an
expression of professionalism and seriousness for an inventor. Yet the processes and
outcomes are not always satisfactory. What would help inventors are clear directions at an
early stage. While this is something for inventors themselves to accept most responsibility, it
does point to a confused context in which IP decisions are made: mistakes have proven costly
and difficult to resolve.
Recommendation 2: That the government assist TUIS in learning about best practices
for IP management.
The analysis of the innovation governance context of TUI cases shows that a number of
factors work against successful innovation. While positive experiences were had by some
TUIs, many suffered from incompetent or dishonest individuals; complex processes and
documentation, especially in funding applications; and confused policy settings (noted in the
energy sector and energy-efficiency aspects of the building sector). Given these factors
working against successful innovation, we make the following policy recommendation:
Recommendation 3: That the government modify business support services for TUIS so
that they are simpler and have less financial risk for TUIs that use them.
We know from our case studies that innovation is both exceedingly hard work but very
satisfying, even rather exciting. But our interviewees spoke of an environment where the
prevailing cultural attitudes often work against them. There were three main ways this
occurred. First, as fundamentally creative people they believed that the society did not support
their creative nature. That low incentives exist in New Zealand for ‘idea champions’, was
noted by Gilbertson et al. (1992), as was the ‘squashing and control’ of creative people. That
high personal risk is a feature of innovation is also accepted by TUIs, not least in their
commitment of personal savings and business profits to their innovations. Reassuringly, even
though TUI people understand the ‘tall poppy’ syndrome of New Zealand culture, this was
never seen as obstructive: most TUI people were so confident in their abilities they are more
inclined to think opponents as wrong, even stupid, and work on regardless.
There was also a prevailing sense that participants in the network that they did approach,
especially important ones like banks and regulatory agencies, did not readily understand the
44
realities of technological invention. There were strong perceptions by innovators of excessive
influence by officials, bureaucrats, accountants and lawyers, particularly within government
departments and some of the regional development organisations and incubators. While
accepting the biases and prejudices inherent in such communities, we interpret this as a gap in
technological literacy, the skills, understanding and insight associated with using,
manipulating and advancing technologies. Many previous studies (Gilbertson et al., 1995;
Gilbertson et al., 1992; Winsley et al., 2001) argue there are difficulties in embedding
‘attitude change’ in New Zealand innovation governance, a feature of the building and energy
sectors that our participants were concerned about.
Third, there was the ‘short-termism’ of senior management, also recorded by Gilbertson et
al. (1992), that was particularly noticeable in the energy sector, with several cases arguing that
the time required for innovations in this area were such that a degree of surety was needed to
gain and retain support. Several interviewees spoke of their concerns for the lack of focus and
investment in training and apprentice programmes. Both sectors were undergoing
restructuring during our research, although TUI voices are not evident in the political and
technical debates that this involves. We would argue this is to the detriment of any sustainable
solutions. Others also commented on the education of children and young people, seeing a
downgrading of the practical skills that they acquired as children and young people in their
fathers’ workshops. What would help inventors is wider societal understanding but beyond
mere moral support, in fact we use the term ‘technological literacy’ to define the
communication gaps in the struggle technology innovators face in assembling their support.
Recommendation 4: That the government, in its various public awareness initiatives to
highlight the importance of innovation, raise the public profile of TUIs by making
explicit reference to them.
Another theme in these results is involvement in other businesses. We know from our case
studies that this provides experience and contacts that are highly relevant for addressing the
challenges which inventors face as they bring their invention to market. While innovators
have many opportunities to engage in other business activities, the supportive operation of
these activities requires a broader business climate of efficiency, trust, and competence, and
we would argue this goes beyond the current review of the Securities Act (Wilson, 2004).
Many of our case studies expressed strong cynicism towards government and large corporate
interests in their reluctance to innovate due to vested interests in the status quo.
Recommendation 5: That the government investigates the main barriers to good trust
relationships between TUIs and other businesses and identify options to improve them.
With other business activities being such a key component of TUI success, policies and
support for small-to-medium sized businesses in New Zealand is an area in which the TUI
community would obviously benefit. Also, with the husband/wife partnerships identified as
integral to many TUI stories, and the obviously heavy workload that these couples take on
when they attempt to launch an innovation, policies that ease this workload and minimise the
costs and requirements of this reporting, would be of great benefit.
The most common feature of the failure of TUI cases was their lack of membership in the
networks of finance, government, IP and other businesses, yet with strong membership in
manufacturing. These features describe the iconic image of the Kiwi back shed/number 8 wire
inventor. There needs to be ways to encourage inventors to get out of the shed. But for many
45
this goes against the grain. Innovation clubs, websites, mentoring services, help desks,
competitions, all exist and often provide excellent support.
Recommendation 6: That the government investigate barriers to TUIS participating in
business networks, with a view to identifying options to support such networks and
TUIS participation in them. In particular, there is a need for a government supported
website to facilitate inventor engagement in their socio-technical networks.
The small size of the New Zealand market was a constant constraint in the building sector:
You are jammed up against it, you know that to provide it for x amount of
money you have to run off 50,000, 100,000… but the shops are saying listen
we will put a dozen in and see how they go. You can’t put a dozen in without
buying 100,000, at that point you realise that you are dealing with a small
country.
One case study noted that if he sold one of his product to each builder in New Zealand, that
would amount to about 1,400 sales it would just about cover his costs. He needed to export
but had misread the Australian market and was now looking at the US. An interview with a
building company representative illustrated New Zealand’s reliance on international
technology in the sector, with strategies of overseas searches by ‘technology tourists’ for
innovations. As noted in the literature review, innovation systems are global entities.
Recommendation 7: That the government investigate and address the main barriers to
TUIs participating in its initiatives to connect New Zealand innovators with foreign
business networks.
The role of the Building Research Association of New Zealand (BRANZ) – an independent
research company – is central to many innovators in the building sector. Funded via a levy on
building consents, through FRST, and by revenues generated through commercial research
projects, BRANZ’s key role for innovators is the provision of appraisals, ‘independent
assessments of building products, materials, systems or methods of design or construction’.15
However, operating as a ‘cost recovery’ agency, many innovators participating in this process
see it as a ‘grudge purchase’.
The role of regulatory authorities such as BRANZ and the city and district councils was
considered a serious drag on innovation due to the costs and time lags involved. For several
cases, these constraints were nominated as the reason why their innovation had either failed or
was yet to succeed. Representatives of BRANZ acknowledged many clients resented the role
of BRANZ, whose appraisal was necessary to negotiate the array of authorities who would
otherwise each require assurance of the safety and reliability of the innovators’ claims. In one
case study the inventor themselves took part in the testing process to save time and money;
this may be an approach that BRANZ could formalise and encourage for smaller innovators
like TUIs who have great technical abilities and a strong desire to minimise costs and delays.
Recommendation 8: That the government investigate more flexible arrangements to
simplify and streamline the compliance of TUIs with regulatory approval procedures.
15
See http://www.branz.co.nz/cms_display.php
46
As we noted earlier, finding cases of TUI in the energy sector was more difficult than in
farming of building. While all three sectors have their technical challenges, it might be argued
the energy sector epitomises the difficulties in technological innovation, with many years
training and work experience behind those who even attempt an energy innovation. Much of
the paraphernalia of this sector – tools, workshop facilities, and specialised materials – are
often expensive. TUI cases in this sector were more likely to be familiar with, and possess, IP,
as it is more common within the sector as a whole and where innovators need to collaborate,
potential partners generally require a clear delineation of who owns what.
Recommendation 9: That the government support the establishment of an innovation
centre that draws together the technological skills and insights of TUI.
It is clear to us that the Kiwi backshed inventors are more sophisticated and can potentially
contribute more to New Zealand’s economic growth – as they have in the past – yet they
require more practical help than is evident. As human and social capital, these
inventors/innovators are well-placed to contribute to technology policy, education and
regional development yet too often exist as isolated small-business people instead of the
resilient contributors to the innovation ecology of the country.
5.4
Conclusion
Innovation by technology users is an important cultural component of New Zealand’s
historical development and contemporary perceptions. This type of innovation continues,
particularly in farming but with significant efforts in the building and energy sectors. But this
community of innovators is also clearly struggling with an innovation governance context in
which access to capital, sympathetic and relevant support, and accurate information is limited.
Successful TUI cases are adept at sourcing information and support but the costs and efforts
to do this are considerable and even excessive as TUIs draw on valuable social capital while
undertaking many of the necessary ancillary tasks themselves.
A lack of technological literacy among participants in the necessary networks is an obstacle to
innovation. Such literacy seems to be on the decline as fewer New Zealanders work and train
in the trades. Coupled with this is the decline in New Zealand’s manufacturing base although
we note the successful self-directed engagement with Chinese manufacturing that several case
studies demonstrated. Many cases also noted the lack of faith they now had in officials
through the poor performance and actions of particular individuals, and the lack of clear
strategic direction from the relevant Ministries. For technology experts such as the innovators
we interviewed, ignorance, incompetence or dishonesty in officials was very disheartening
and always tainted available options.
Despite these concerns, all of our successful cases benefitted from instances of informal
information exchange with supportive and knowledgeable participants, often people with
particular technological interests themselves. This aspect emphasises social capital and its role
in providing financial capital and other resources for innovation through families, familyowned businesses, and committed networks for innovation.
47
48
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52
Appendix 1
Government funding initiatives
Policy agencies: Ministry of Economic Development, Ministry of Research, Science and
Technology, Ministry of Agriculture and Forestry (Sustainable Farming Fund).
Policies and instruments: FRST, Road Maps for Science (Energy, Nanoscience and
Nanotechnologies, Biotechnology and Environment).
Government implementers: Foundation for Research, Science, and Technology (FRST), NZ
Trade and Enterprise, Energy Efficiency and Conservation Authority (EECA), LGNZ and
Local Economic Development Agencies, Business New Zealand, New Zealand Venture
Investment Fund Limited.
Investment tools: Venture Capital Investment Fund, E-Business Guide, New Zealand
Investment Network, Incubators New Zealand, Industry Capability Network, Business
Mentors New Zealand, New Zealand Private Equity and Venture Capital Association, New
Zealand Angels, Movac, Vcapital, Homebizz Buzz, Bio Pacific Ventures, Endeavour Capital,
Finistere, AgResearch, Connect New Zealand, Pacific Business Trust, Life Wise - The
Employment Generation Fund, The Tindall Foundation, and Poutama Business Trust.
53
Appendix 2
Interview Schedule
Name of Project: Technology Users’ Innovation (TUI)
You are invited to participate in the TUI project by completing the following questionnaire.
The aim of the project is to examine the social setting of innovation and unpack the specific sociotechnical networks to see what is helping or hindering the commercialisation process. This can be
achieved by comparing successful and unsuccessful cases, so even if your innovation is not
commercially successful, it will still provide important information on how to understand and navigate
New Zealand’s innovation networks.
1.
How did this innovation come about?
2.
What is different about this innovation?
3.
What is your target market?
4.
Describe your employment and business activities.
How many people do you employ?
5.
Do you consider yourself an inventor? Businessperson? Do you think you are an
‘outsider’?
6.
Who helps you?
a. Friends, family and/or neighbours
b. How much of the construction or manufacturing processes can you undertake on
your own?
c. Collaboration with universities or CRIs
d. Do you have a partnership with any private companies?
e. Government advisors?
f. Private consultants?
7.
How are you financed?
a. Are your solely reliant on your own money?
b. Have you borrowed? Who from?
c. Do you have access to government funding?
d. Are you partly supported by private companies?
8.
What stage of the innovation process do you think you’re at?
9.
When did you consider innovation this successful?
10.
Are you doing your own marketing? If so, what are the results?
11.
What policy changes would help you?
a. Changes to regulations? (e.g., local council bylaws)
b. Changes in legislation? (e.g., RMA).
c. Better government policy?
12.
Have you taken out any patents, licenses, or copyright applications?
54
Appendix 3
Overall Success
This and subsequent appendices reproduce the results of fsQCA using the software package
fsQCA 2.2 (released January, 2009), derived from Table 3.1. Included are the tables showing
the distribution of TUI cases across the causal combinations and the set-theoretic consistency
of these combinations as subsets of ‘success’ and ‘failure’ (technically non-success) for each
of the three sector we have investigated.
Recall that Raw coverage refers to the proportion of memberships in the outcome explained
by each term of the solution. Unique coverage measures the proportion of memberships in
the outcome explained solely by each individual solution. Consistency is a measure of the
degree to which membership in each solution term is a subset of the outcome. Solution
coverage measures the proportion of memberships in the outcome that is explained by the
complete solution. Solution consistency measures the degree to which membership in the
solution (the set of solution terms) is a subset of membership in the outcome.
From this table we can see how complex innovation configurations are, with no less than nine
distinct configurations to innovation success recorded from our case studies although as Table
1 shows five of these configurations have just a single empirical example among our case
studies. Following the table are results showing the complex, parsimonious and intermediate
solutions that stem from the set of fsQCA software, and are offered to give greater insight into
our data.
Table 1: Truth table for overall success
CAPITAL
0
1
1
0
1
0
1
1
0
1
0
1
0
0
0
GOVT
0
1
1
0
0
1
0
1
1
0
1
0
0
0
0
BIZ
1
0
1
1
1
0
0
1
0
1
1
1
0
0
0
MANU
0
0
0
0
1
1
0
1
1
0
1
1
1
0
1
55
IP
1
1
1
0
1
1
1
1
0
1
0
0
1
0
0
number success consist
1
1
1
1
1
1
5
1
1
1
1
1
5
1
0.984252
1
1
0.943396
3
1
0.890351
9
1
0.872781
1
1
0.867188
4
0.840399
2
0
0.595331
2
0
0.548544
1
0
0.528634
2
0
0.292035
5
0
0.234801
n=2
Complex Solution
frequency cutoff: 2.000000; consistency cutoff: 0.872781
CAPITAL*GOVT*BIZ*IP
CAPITAL*MANU*BIZ*IP
CAPITAL*govt*manu*biz*IP
raw
coverage
0.368421
0.390688
0.082186
unique
coverage
0.129555
0.151822
0.082186
consistency
0.898322
0.912961
0.890351
solution coverage: 0.602429
solution consistency: 0.917386
Parsimonious Solution
frequency cutoff: 2.000000; consistency cutoff: 0.872781
IP
raw
coverage
0.899595
unique
coverage
0.899595
consistency
0.804781
solution coverage: 0.899595
solution consistency: 0.804781
Intermediate Solution
frequency cutoff: 2.000000; consistency cutoff: 0.872781
Assumptions: BIZ, GOVT, and CAPITAL present.
CAPITAL*MANU*IP
CAPITAL*BIZ*IP
raw
coverage
0.451822
0.604049
unique
coverage
0.115790
0.268016
consistency
0.926141
0.893413
solution coverage: 0.719838
solution consistency: 0.897527
n=1
Complex Solution
frequency cutoff: 1.000000; consistency cutoff: 0.867188
capital*govt*BIZ*manu
capital*GOVT*biz*MANU
CAPITAL*biz*manu*IP
CAPITAL*BIZ*MANU*IP
CAPITAL*GOVT*manu*IP
CAPITAL*GOVT*BIZ*IP
raw
coverage
0.141296
0.055466
0.115789
0.390688
0.233198
0.368421
unique
coverage consistency
0.097571 0.991477
0.046964 0.769663
0.082186 0.919614
0.108097 0.912961
-0.000000 1.000000
0.005263 0.898322
solution coverage: 0.780567
solution consistency: 0.915480
56
Parsimonious Solution
frequency cutoff: 1.000000; consistency cutoff: 0.867188
GOVT*biz
CAPITAL*IP
BIZ*manu
capital*govt*BIZ
raw
coverage
0.080972
0.732794
0.441296
0.170445
unique
coverage
0.044939
0.338057
0.043725
0.006478
consistency
0.666667
0.892505
0.837174
0.884454
solution coverage: 0.889474
solution consistency: 0.809208
Intermediate Solution
frequency cutoff: 1.000000; consistency cutoff: 0.867188
Assumptions: BIZ (present) GOVT (present) CAPITAL (present)
BIZ*manu
GOVT*MANU*biz
CAPITAL*manu*IP
CAPITAL*BIZ*IP
raw
coverage
0.441296
0.055466
0.451822
0.604049
unique
coverage
0.105263
0.046964
0.107288
0.268016
consistency
0.837174
0.744565
0.926141
0.893413
solution coverage: 0.872065
solution consistency: 0.844044
57
Appendix 4
Overall Failure
Table 2: Truth table for overall failure
CAPITAL
0
0
0
1
0
0
0
0
0
1
1
1
1
1
1
GOVT
0
0
0
0
1
1
1
0
0
0
0
1
1
0
1
BIZ
0
0
0
1
1
0
0
1
1
1
0
1
1
1
0
MANU
1
1
0
1
1
1
1
0
0
0
0
1
0
1
0
IP
1
0
0
0
0
1
0
1
0
1
1
1
1
1
1
number success consist
1
1
1
5
1
1
2
1
1
2
1
0.917476
2
1
0.879377
1
0
0.754717
1
0
0.710938
1
0
0.631769
1
0
0.600000
4
0
0.588529
3
0
0.495614
9
0
0.464497
5
0
0.403651
5
0
0.293963
1
0
0.289157
n=2
Complex Solution
frequency cutoff: 2.000000; consistency cutoff: 0.879377
raw
coverage
capital*govt*biz*ip
CAPITAL*govt*BIZ*MANU*ip
capital*GOVT*BIZ*MANU*ip
0.103279
0.123497
unique
coverage consistency
0.338251 0.338251 1.000000
0.103279 0.917476
0.123497 0.879377
solution coverage: 0.565027
solution consistency: 0.955638
Parsimonious Solution
frequency cutoff: 2.000000; consistency cutoff: 0.879377
ip
govt*BIZ*manu
raw
coverage
0.705465
0.153552
unique
coverage
0.640437
0.088525
consistency
0.838856
0.431644
solution coverage: 0.793989
solution consistency: 0.723966
58
Intermediate Solution
frequency cutoff: 2.000000; consistency cutoff: 0.879377
Assumptions: BIZ (absent) GOVT (absent) CAPITAL (absent)
ip*MANU*capital
ip*MANU*govt
ip*biz*govt*capital
raw
coverage
0.494536
0.392350
0.338251
unique
coverage
0.173224
0.071038
0.077596
consistency
0.915066
0.956059
1.000000
solution coverage: 0.643169
solution consistency: 0.920970
n=1
Complex Solution
frequency cutoff: 1.000000; consistency cutoff: 0.879377
raw
coverage
capital*govt*biz*ip
capital*govt*biz*MANU
CAPITAL*govt*BIZ*MANU*ip
capital*GOVT*BIZ*MANU*ip
0.304918
0.103279
0.123497
unique
coverage
0.338251
0.044262
0.103279
0.123497
consistency
0.077596 1.000000
0.942568
0.917476
0.879377
solution coverage: 0.609290
solution consistency: 0.931495
Parsimonious Solution
frequency cutoff: 1.000000; consistency cutoff: 0.879377
capital*govt*biz
BIZ*MANU*ip
raw
coverage
0.415301
0.296721
unique
coverage
0.415301
0.296721
consistency
0.914561
0.855118
solution coverage: 0.712022
solution consistency: 0.888813
Intermediate Solution
frequency cutoff: 1.000000; consistency cutoff: 0.879377
Assumptions: BIZ, GOVT, and CAPITAL present.
capital*govt*biz*ip
capital*govt*biz*MANU*
GOVT*BIZ*MANU*ip*
CAPITAL*BIZ*MANU*ip*
raw
unique
coverage
coverage
consistency
0.338251
0.077596
1.000000
0.304918
0.044262
0.942568
0.165027
0.060109
0.836565
0.208197
0.103279
0.833698
solution coverage: 0.650820
solution consistency: 0.915450
59
Appendix 5
Farming success
Table 3: Farming success truth table
CAPITAL
1
1
0
0
1
0
0
1
0
0
IP
1
1
0
1
1
1
0
0
0
0
MANU
0
1
0
0
1
1
1
1
0
1
BIZ
1
1
1
1
1
0
1
1
0
0
GOVT
1
1
0
0
0
1
1
0
0
0
number
1
3
1
1
2
1
1
1
1
4
success
1
1
1
1
1
1
0
0
0
0
consist
1
1
1
1
0.980263
0.909091
0.51282
0.359551
0.2
0.181269
Complex Solution
frequency cutoff: 1.000000; consistency cutoff: 0.909091
capital*manu*BIZ*govt
CAPITAL*IP*MANU*BIZ
CAPITAL*IP*BIZ*GOVT
capital*IP*MANU*biz*GOVT
raw
coverage
0.235366
0.446341
0.307317
0.073171
unique
coverage
0.168293
0.114634
0.042683
0.073171
consistency
0.984694
0.991870
1.000000
0.909091
solution coverage: 0.730488
solution consistency: 0.980360
Parsimonious Solution
frequency cutoff: 1.000000; consistency cutoff: 0.909091
IP
manu*BIZ
capital*BIZ*govt
raw
coverage
0.875610
0.376829
0.307317
unique
coverage
0.513415
0.000000
0.015854
consistency
0.876679
0.922388
0.890459
solution coverage: 0.962195
solution consistency: 0.856677
Intermediate Solution
frequency cutoff: 1; consistency cutoff: 0.909091 Assumptions: BIZ GOVT and CAPITAL present.
manu*BIZ
MANU*IP*GOVT
BIZ*IP*CAPITAL
raw
coverage
0.376829
0.376829
0.489024
unique
coverage
0.178049
0.108537
0.108537
consistency
0.922388
0.962617
0.992574
solution coverage: 0.779268
solution consistency: 0.939706
60
Appendix 6
Farming failure
Table 4: Farming Failure Truth Table
CAPITAL
0
0
1
0
1
0
0
1
0
1
IP
0
0
0
0
1
1
0
1
1
1
MANU
1
0
1
1
0
1
0
1
0
1
BIZ
0
0
1
1
1
0
1
1
1
1
GOVT
0
0
0
1
1
1
0
1
0
0
number
4
1
1
1
1
1
1
3
1
2
success
1
1
1
1
0
0
0
0
0
0
Complex Solution
frequency cutoff: 1.000000; consistency cutoff: 0.880342
raw
coverage
capital*ip*biz*govt
CAPITAL*ip*MANU*BIZ*govt
capital*ip*MANU*BIZ*GOVT
0.110256
0.132051
unique
coverage consistency
0.519231 0.519231 1.000000
0.110256 0.966292
0.132051 0.880342
solution coverage: 0.761538
solution consistency: 0.972177
Parsimonious Solution
frequency cutoff: 1.000000; consistency cutoff: 0.880342
ip*MANU
biz*govt
ip*biz
raw
coverage
0.771795
0.564103
0.562820
unique
coverage
0.303846
0.044872
0.000000
consistency
0.931889
0.880000
1.000000
solution coverage: 0.911538
solution consistency: 0.872393
Intermediate Solution
frequency cutoff: 1.000000; consistency cutoff: 0.880342
Assumptions: MANU (absent) BIZ (absent) CAPITAL (absent)
raw
coverage
MANU*ip*capital
0.662820
MANU*ip*govt
0.570513
biz*ip*govt*capital
0.519231
solution coverage: 0.841026
solution consistency: 0.956268
unique
coverage
0.175641
0.083333
0.094872
consistency
0.945155
0.965293
1.000000
61
consist
1
1
0.966292
0.880342
0.88
0.606061
0.448276
0.419355
0.385185
0.210526
Appendix 7
Building success
Table 5: Building success truth table
CAPITAL IP
1
1
1
1
1
0
1
1
1
0
0
1
1
0
1
0
MANU BIZ
1
0
1
1
1
1
1
1
1
0
0
0
1
1
0
1
GOVT
0
0
1
1
0
1
0
1
number
1
2
3
3
2
1
3
1
Complex Solution
frequency cutoff: 1.000000; consistency cutoff: 0.819149
CAPITAL*IP*biz*manu
CAPITAL*IP*BIZ*MANU
capital*GOVT*ip*biz*MANU
CAPITAL*GOVT*IP*manu
CAPITAL*GOVT*IP*BIZ
raw
coverage
0.189815
0.357407
0.071296
0.296296
0.337037
unique
coverage consistency
0.116667 0.907080
0.193518 0.939173
0.055555 0.819149
-0.000000 1.000000
0.012037 0.903226
solution coverage: 0.775926
solution consistency: 0.912854
Parsimonious Solution
frequency cutoff: 1.000000; consistency cutoff: 0.819149
IP
GOVT
biz*MANU
capital*MANU
raw
coverage
0.936111
0.472222
0.120370
0.197222
unique
coverage
0.407407
0.000926
-0.000000
0.015741
consistency
0.799210
0.728571
0.710383
0.750000
solution coverage: 0.987037
solution consistency: 0.717362
Intermediate Solution
frequency cutoff: 1.000000; consistency cutoff: 0.819149
Assumptions: MANU, BIZ and CAPITAL present.
MANU*ip*GOVT
manu*IP*CAPITAL
BIZ*IP*CAPITAL
raw
coverage
0.137037
0.613889
0.682407
unique
coverage
0.055556
0.174074
0.226852
consistency
0.896970
0.886364
0.869104
solution coverage: 0.927778
solution consistency: 0.870547
62
success
1
1
1
1
1
1
0
consist
1
1
0.985849
0.889447
0.857143
0.819149
0.772242
0.657143
Appendix 8
Building failure
Table 6: Building failure truth table
CAPITAL
0
1
0
1
1
1
1
1
IP
0
0
1
0
0
1
1
0
MANU
0
0
0
1
1
1
1
1
BIZ
0
1
1
0
0
1
0
1
GOVT number success consist
0
1
1
1
1
1
1
0.866667
0
1
0
0.606383
1
3
0.604982
0
2
0
0.585034
1
3
0
0.552764
1
2
0
0.307054
1
3
0
0.29717
Complex Solution
frequency cutoff: 1.000000; consistency cutoff: 0.866667
capital*govt*ip*manu*biz
CAPITAL*govt*ip*MANU*BIZ
raw
coverage
0.146774
0.146774
unique
coverage consistency
0.146774 1.000000
0.146774 0.866667
solution coverage: 0.293548
solution consistency: 0.928571
Parsimonious Solution
frequency cutoff: 1.000000; consistency cutoff: 0.866667
govt*ip
govt*manu*BIZ
raw
coverage
0.377419
0.296774
unique
coverage consistency
0.296774 0.883019
0.216129 0.501362
solution coverage: 0.593548
solution consistency: 0.632302
Intermediate Solution
frequency cutoff: 1.000000; consistency cutoff: 0.866667
Assumptions: MANU (absent) BIZ (absent) CAPITAL (absent)
MANU*ip*govt
biz*ip*govt*capital
raw
coverage
0.258065
0.162903
unique
coverage consistency
0.185484 0.903955
0.090323 1.000000
solution coverage: 0.348387
solution consistency: 0.927039
63
Appendix 9
Energy success
Table 7: Energy success truth table
CAPITAL IP
1
0
1
1
1
0
1
1
0
1
0
0
0
0
MANU BIZ
1
1
1
1
1
0
1
1
0
1
1
0
0
0
GOVT
0
0
0
1
1
1
1
number
1
2
1
3
1
1
1
Complex Solution
(frequency cutoff: 1.000000, consistency cutoff: 0.753846).
raw
coverage
0.235088
0.515789
CAPITAL*govt*IP*manu
CAPITAL*GOVT*IP*BIZ
unique
coverage consistency
0.235088 0.985294
0.515789 0.821229
solution coverage: 0.750877
solution consistency: 0.866397
Parsimonious Solution
(frequency cutoff: 1.000000 consistency cutoff: 0.753846).
CAPITAL
raw
coverage
0.840351
unique
coverage consistency
0.840351 0.850799
solution coverage: 0.840351
solution consistency: 0.850799
Intermediate Solution
frequency cutoff: 1.000000 consistency cutoff: 0.753846
Assumptions: MANU (present) BIZ (present) CAPITAL (present)
raw
coverage
manu*IP*CAPITAL
BIZ*IP*GOVT*CAPITAL
unique
coverage consistency
0.501754 0.235088 0.993056
0.515789
0.249123 0.821229
solution coverage: 0.750877
solution consistency: 0.866397
64
succes
1
1
1
1
0
0
0
consist
1
1
0.973684
0.753846
0.560748
0.224719
0.19802
Appendix 10
Energy failure
Table 8: Energy Failure Truth Table
CAPITAL IP
0
0
0
0
0
1
1
0
1
1
1
0
1
1
MANU BIZ
1
0
0
0
0
1
1
1
1
1
1
0
1
1
GOVT
1
1
1
0
1
0
0
number
1
1
1
1
3
1
2
succes
1
1
1
0
0
0
0
Complex Solution (frequency cutoff: 1.000000, consistency cutoff: 0.841122).
capital*govt*biz*MANU
capital*GOVT*BIZ*MANU*ip
raw
unique
coverage coverage consistency
0.341860 0.341860 1.000000
0.209302 0.209302 0.841122
solution coverage: 0.551163
solution consistency: 0.933071
Parsimonious Solution
(frequency cutoff: 1.000000, consistency cutoff: 0.841122).
capital
raw
coverage
0.804651
unique
coverage consistency
0.804651 0.791762
solution coverage: 0.804651
solution consistency: 0.791762
Intermediate Solution
frequency cutoff: 1.000000 consistency cutoff: 0.841122
Assumptions: MANU (absent) BIZ (absent) CAPITAL (absent)
ip*MANU*capital
MANU*biz*govt*capital
raw
coverage
0.472093
0.341860
unique
coverage consistency
0.237209 0.922727
0.106977 1.000000
solution coverage: 0.579070
solution consistency: 0.936090
65
consist
1
1
0.841122
0.666667
0.434615
0.289474
0.243421
Appendix 11
Case Studies
What follows is a brief description of our case studies that tries to maintain confidentiality and
yet provide a justification for our approach and enough detail to be of interest. Each case
study is assigned a letter representing its sector (F, B, and E for Farming, Building, and
Energy respectively), and fuzzy scores for each of our five conditions are also given.
Farming
F1
A product of a serial inventor with several small family-oriented companies, one of which
undertakes most of the manufacturing with interests in other sectors including ICT and
importing. Located in small rural town, husband and wife team with roles of the inventor and
administrator respectively, the family has a history of farming in the area although this was
‘barely economic’ towards the end. Innovation began in 1989, a company being formed in
1993. Successive innovations contributed to current model. Considerable networking, training
and research undertaken over the course of the innovation, and a website and professionally
produced brochures have enabled successful marketing, as do regular appearances at Field
days where the product is demonstrated in action.
The business received poor advice regarding IP in the early stages of developing the
innovation. Extensive business networking has identified other opportunities which the couple
have taken up, including international business partners who are collaborating with two
projects.
Variable
K
G
IP
M
B
S
Notes
$100,000 (self-financed and bank loans)
$75,000 (Regional Development and NZTE funds; collaboration with
AgResearch).
16 patent applications, 11 granted or filed; two trademarks.
Most, although some subcontracted out.
Extensive farming networks; importing and distribution rights to several
products; collaboration in IT industry.
Several awards, considerable national and some international sales.
Score
0.6
1
1
0.83
1
1
F2
From an idea in 2001, this innovation won an award at the National Fieldays several years
later. However, sales were not forthcoming: only three were manufactured, all by the inventor
himself who works for a local engineering firm. Manufacturing and tinkering takes place in
his own workshop after his ‘day’ job. This case study was the first of several that could be
classified as the ‘classic’ Kiwi backshed, ‘Number 8 wire’ invention: little financial capital;
no help from or engagement with any formal organisations (including intellectual property
lawyers or offices); and no formal firm or company structure.
Variable
K
G
IP
M
B
S
Notes
Little capital investment
No govt support
Copyright
All manufacturing undertaken by inventor
Employed with no other business networks; husband/wife team.
Only a few ever made.
66
Score
0.02
0
0.23
1
0
0
F3
The inventor had previous experience of an innovation that failed, and the husband and wife
team now had more experience of process and strategies. Most manufacturing is still
undertaken by the inventor himself, although two components are supplied by local firms and
assembled by the couple. The inventor’s wife has taken on the administration and
promotional aspects of this innovation, producing brochures and attending regional fieldays
when possible to demonstrate the product. A family member helped construct a website and
produce a computer disc for promotion. A top law firm was engaged for patenting and trade
marking the innovation.
Some financial support has been won from regional development programmes and
government funding, and ‘moral’ support has come from a semi-formal network of fellow
innovators. A concern was that the 12 month period for utilising government funds was too
short. Regular sales enable the couple to continue building on their success, and prospects are
held for the potential to export.
Variable
K
G
IP
M
B
S
Notes
Little capital investment of approx. $5,000 (self-financed)
$15,000; contact and support through business mentoring.
Trademark and design protection
Most manufacturing, with two other suppliers providing components.
Husband/wife team.
Regular NZ sales; occasional exports
Score
0.04
1
0.66
0.67
0
0.6
F4
The inventor has a background in carpentry and building and also has considerable experience
of several different commodity sectors. This particular innovation came about through a
problem with previous products. Workplace discussions led to experimentation to produce a
prototype; the final design was subsequently achieved with a week’s tinkering. An export sale
was achieved the first time the innovation was demonstrated. Subsequent actions by a
government agency caused concern and seemed to confirm for the inventor the ills of
bureaucracy: She was a bloody nightmare. Exports sales were also achieved with no formal
contract in place despite expensive legal and professional advice that again seemed to
needlessly complicate the process.
I don’t really deal with them because I’m a different brew. I’m a contract
worker, I find that they are a bunch of leeches and they are always going
to be a bunch of leeches, they are not doers.
The current business is a family firm, owned by the inventor who has his son running the
company which employs 16 to 18 people. The inventor’s wife originally “did a fair bit of
paperwork”. The company does all its own marketing and advertising including a website that
“probably needs updating”. Several people have tried to copy the innovation including in
Australia. While action was undertaken in New Zealand to stop copying, the costs of doing
this in Australia, estimated at $80,000, were considered prohibitive. This inventor was
fiercely independent, to the point of refusing a government award and cash for complying
with a photo-opportunity: “I don’t rely on anyone.”
Variable
K
G
IP
M
B
S
Notes
Significant financial investment of approx. $100,000 (self-financed and bank)
No govt. support
Patented and two Trade marks
Most manufacturing undertaken in-house
Extensive business experience in two other sectors; 16-18 employees
Strong export sales
67
Score
0.6
0
1
0.83
1
1
F5
The inventor of this innovation was a fitter and turner by trade beginning in the 1960s, and
with experience of innovation dating back to 1979 when he modified an existing piece of
technology. Although successful, he did not patent or promote his innovation and
subsequently saw the same technology innovation commercialised by a major farm machinery
manufacturer.
I didn’t know anything about [IP] because I just made things for my
own farm.
For this innovation, the inventor was again of the classic Kiwi inventor mould. He made the
entire product but struggled to make enough profit to justify the effort. While he investigated
taking out IP protection, it was considered too expensive, as was advertising although he
persevered with that for some time.
Variable
K
G
IP
M
B
S
Notes
Little capital investment of approx. $2,000 (self-financed)
No govt support
Copyright; further investigations were made but abandoned.
All manufacturing
Limited business networks
Limited sales (approx. 50), mainly locally.
Score
0.03
0
0.23
1
0
0.2
F6
The inventor was the father of the current business owner and came up with the idea and
innovation in 1975. All finance and manufacturing was originally contained within the
family; manufacturing was now done in China. (A local firm had previously undertaken a key
part of manufacture but changed their processes and could no longer provide this service.)
Patenting and trade marking were taken care of by a major law firm without problems.
The son now worked fulltime on another business but still devoted efforts to his father
invention including scoping North America for export opportunities. Very few others were
involved in getting this innovation up and running; few were needed to maintain it now
although help was acknowledged as being needed for the US export market.
Variable
K
G
IP
M
B
S
Notes
Personally financed approx. $10,000
No govt. support
Original patent expired; copyright and trademark
Most manufacturing now undertaken in China
One other business operated
Successful national sales ($500,000/yr)
Score
0.06
0
0.66
0.17
1
0.8
F7
The interviewee was a key employee of the actual inventor who just ‘wasn’t interested’ in
talking about his work. The original concept was provided by a farmer who personally
approached the inventor about ten years ago; the innovation itself has only been on the market
about 5 years. Although IP was not originally secured, an IP lawyer has since been engaged.
He’s got a damn good attorney, patent attorney, so that’s how we
try to kick arse. Yes he knows he should have done it [earlier]!
With several other firms interlinked, the inventor has extensive business networks to draw on,
based in a small rural town within a strong dairying region. The inventor’s own businesses are
able to undertake most of the manufacturing processes, with just one component and one
process outsourced. The firm also does all its own marketing including website and
68
brochures. Strong sales have been achieved, particularly in the North Island but the product
has been successfully exported to Australia although the personal sales pitch was seen as
vital: “When I’m there they sell, when I’m not there they don’t move”.
Variable
K
G
IP
M
B
S
Notes
Self-financed, approx. $100,000
No govt. support
Trademarked; several patents, designs etc held in other companies
Extensive manufacturing capacity
Extensive business networks
Strong national and international sales
Score
0.6
0
0.97
0.83
1
1
F8
This innovation dates back 20 years and is now owned and promoted by the inventor’s
daughter and granddaughter. Based in a relatively isolated farming community, the product
was self-financed with no government support, manufacturing being undertaken by a firm in
the nearest city, approximately 250 km. distant. Family members undertook some assembly.
Possessing excellent practical skills, the inventor had good links through the local and
regional farming and hunting communities, including contacts with old WW2 comrades. He
was very independent:
There was only one way of doing it and that was his way.
Regular sales are made through fieldays although the costs for the Mystery Creek Fieldays
were considered too expensive (citing $3,000). It has proven difficult to maintain links with
retailers such as stock agents although some regular orders are still made. Some product has
been exported to the UK although not to the degree that would enable a score of ‘1’ for
Success.
Variable
K
G
IP
M
B
S
Notes
Little funding
No govt. support
Patent expired
Local manufacturing utilised; some self-assembly
Good links through farming and family, building on previous innovation
experience with study.
Regular sales through fieldays; very limited exports to UK.
Score
0.03
0
0.23
0.33
1
0.8
F9
An invention essentially concerned with animal welfare, by an inventor that loved animals
that has struggled to ‘take off’ due to the indifference of the target market. There was media
promotion with a number of articles being written when it first released, and a black and
white pamphlet and colour brochure being produced, but it has only achieved limited
distribution through personal contacts.
Variable
K
G
IP
M
B
S
Notes
Limited funding
No govt. support
Copyright
Local manufacturing utilised
Links limited to farming.
Struggling sales; not supported by key market
69
Score
0.03
0
0.57
0.33
0
0.2
F10
An invention from a ‘passionate’ farmer who has set about refining and promoting his
invention with quiet dedication. Self-financed from an overdraft facility as well as selling
shares, the innovation is now protected by a separate trust from the farm itself. Some support
has been accessed from a regional development agency, including mentoring although that
was not considered usefully. A strong local supporter with engineering skills and networks
was credited with help: “He’s been fantastic, he hasn’t charged one cent for his time or his
advice or anything”. IP in the form of patents and trademarks have been secured.
Manufacturing was originally by a Wellington firm; the product is now made in Auckland
although at the time of the interview the inventor had concerns about the quality of the finish.
The inventor enjoys good business networks through involvement in a previous innovation
(which failed), and a farming partnership with a family member and comprising several farms
in total.
Variable
K
G
IP
M
B
S
Notes
Self-financed, approx. $50,000
Regional development agency support (mentoring)
Two patents (one expired) and Trademark
Inventor made early prototypes; now made by Auckland firm
Good industry and regional contacts including other business activities that
include previous innovation experience
Some sales made and advance orders received; inquiry from US
Score
0.52
1
0.94
0.17
1
0.6
F11
A unique invention that has helped the inventor’s business remains profitable in a competitive
market where he needed to cut costs as a ‘necessity’, ‘to stay in the game’. The inventor
worked primarily alone, accessing some engineering from a local firm, and was self-financed
from his own business, using about $350,000. He refused to patent the invention, in fact
would be happy for it to be copied if it helped others in his situation stay in business:
If anyone in New Zealand wants to know how to make it,
I’ll tell them!
The inventor has profited from a previous innovation in the farming sector which he first
patented worldwide before selling the patents.
Variable
K
G
IP
M
B
S
Notes
Self-financed from own business, approx. $350,000
No govt. help sought
Copyright (Has previous experience of IP)
Most manufacturing done by inventor
Also agent for import business
A one-off innovation that works for the purpose it was designed
Score
0.88
0
0.23
0.83
1
0.2
F12
A software package that was first developed in the early 1990s at a university and has been
undergoing regular improvements and upgrades ever since, this innovation has now expanded
beyond its immediate target market and has secured considerable private capital for future
development. No government help has been accessed but as the innovation originated within
the NZ university system, the case is not scored as non-membership; rather it is scored as
having minimal government support. No patent has been taken out, instead the company
relies on secrecy and complexity and ongoing improvements to protect their IP.
All development takes place within the company with two employees offering feedback and
70
ideas; considerable useful feedback comes from end-users. The original inventor has
considerable networks and an investment partner brings a wider network of business networks
that have aided expansion of the market. Strong sales have been achieved in the original
target market of farmers, and sales are growing from the greater opportunities now evident.
Variable
K
G
IP
M
B
S
Notes
Private investment capital of $1,000,000
Originated within public university environment
Trademarked; IP further ‘secured’ by complexity and secrecy
All development takes place in-house
Considerable business networks from inventor and investment partner
Strong sales in original target market; growing sales from widening market
Score
1
1
0.66
1
1
0.8
F13
A quirky case study, one of the few in which the inventor is female, this innovation is
essentially a home-built solution to a simple problem. Now farming, the woman has had wide
work experience after originally growing up on her parents’ farm. No financial investment
has been made in the innovation, no support was sought or needed, IP was not relevant,
eliciting the comment that:
That would be selfish.
Only one prototype of this invention exists but it has been ‘used by the neighbours’.
Variable
K
G
IP
M
B
S
Notes
No costs
No govt support
No IP
Made at home with other components for home farm use.
Limited farming networks
No sales
Score
0.02
0
0.03
0.67
0
0
F14
A similar case to F2, F3 and F5, the inventor is a fitter and turner working for a small firm in
a farming district. He came up with the idea, designed and manufactured all the products to be
sold, and sold about 50 regionally. No outside support was sought except for advice on IP
which consisted of ‘writing the idea on a letter and posting it to myself’.
Variable
K
G
IP
M
B
S
Notes
Minimal capital invested in development
No govt support
No IP
Copyright
Employment as tradesman the sole business activity
Limited regional sales
Score
0.03
0
0.23
1
0
0.2
F15
A similar product to F1, and also the result of a husband/wife farming ‘team’. The invention
originated when the husband sought to improve a particular process with stock handling; the
innovation came about when a farm visitor in 1994 commented on the cleverness and wider
applicability of the prototype. A Fieldays demonstration quickly followed and a few units
were made and sold although sales were flat until about 2002 when sales showed a rapid
growth.
71
Some government help has been sought over time. Free mentoring advice available through a
regional initiative was well received; interactions over applications for funding have been
unsatisfactory. Most manufacturing is done in house with staff being hired as demand
requires. The recession has hit this innovation hard, halting a major push into the Australian
market and at the time of the interview the couple were considering laying off more staff.
Variable
K
G
IP
M
B
S
Notes
Self-financed, approx. $100,000
$5,000 grant; business mentoring
Copyright, patent, trademark
Undertakes most manufacturing
Husband/wife team access various business opportunities
Strong national sales
Score
0.6
1
0.66
0.83
1
0.8
F16
An innovation from a ‘natural’ inventor who has come up with several other agriculturalfocused innovations. For this particular innovation he devoted 40 days ongoing
experimentation but hasn’t sought to commercialise the result. The inventor has been able to
access advice from one experienced technology practitioner in his region, and finds the region
supportive of innovation in general.
A research institute was approached through a personal contact which enabled a limited
collaboration for independent assessment of the innovations specifications.
Variable
K
G
IP
M
B
S
Notes
Approx. $20,000 estimated costs
Government grant
Copyright
Undertakes significant degree of manufacturing
Good regional networks; widening contacts through innovation
Sales not sought
Score
0.14
1
0.23
0.83
1
0.2
Building
B1
The outcome of an insight from the inventor who was a tradesman and with his trade skills
and trial and error approach has developed a system of home heating. The prototype was
installed in his own house over two decades ago, with ongoing refinements. A family
business now owns and operates all aspects of the innovation including advertising and a
website. Franchising was tried several years ago but failed through quality control issues.
Three patents and a trademark have been granted but are viewed as ‘useless’ as they require
expensive legal action to actually defend. The inventor has some networks through his work
but has relied a lot on word of mouth and a website – developed by his daughter - for
promotion. A second system has been developed and has become a second business.
Variable
K
G
IP
M
B
S
Notes
$100,000
No support
Three patents and a trademark
All installation but reliant on suppliers for most components
Two interconnected business operated
Strong national sales
72
Score
0.6
0
0.97
0.67
1
0.8
B2
The invention of one of the few female inventors interviewed, who had to juggle a young
family as a solo mum for much of the early days of this innovation. While learning many
different aspects of the building trade, this inventor also went back to school to learn subjects
needed for higher professional qualifications. Construction is undertaken by licensees and
accredited specialists. Regular awards, word-of-mouth, appearances at relevant building
shows, and a well-maintained website – including the history and ongoing developments of
the building system - have helped achieve strong nationwide sales.
Variable
K
G
IP
M
B
S
Notes
$250,000
Grant from regional development agency
Patent ‘voided pre-acceptance’; two Trademarks held
Involvement in manufacturing now limited
Sole business
Good and ongoing nationwide sales
Score
0.8
1
0.79
0.17
0
0.8
B3
This innovation came about as a response to the ‘leaky building’ syndrome in the NZ
residential sector where the inventor has been working as a specialist for several years. Selffinanced to almost $1.5m with a business partner and close associate, the partnership has a
wide product range but is yet to realise significant returns. All products are now manufactured
by a single specialist firm in the North Island.
As with others interviewed in the building sector, government and its agencies are seen to be
major obstacles:
…what they are saying is, like everybody does, the law is some
infallible bloody fountain of wisdom and knowledge!
Variable
K
G
IP
M
B
S
Notes
Self-financed with a business partner
No govt assistance
Three patents, all abandoned
Manufactured in North Island
Extensive business and consultancy networks
Limited sales
Score
1
0
0.94
0
1
0.5
B4
An invention that has been inspired by overseas products, especially in North America, that
has aspects of a traditional craft. It has been self-financed with considerable investments in
time and travel costs by the inventor. The associated business was owned in partnership with
another couple, an arrangement that did not prove satisfactory and at the time of the interview
was in the process of being restructured.
A wide array of professional relationships is maintained. The inventor has had very positive
initial interactions with a regional business mentoring scheme and is a member of trade
associations which provides useful contacts. A good relationship also is maintained with a
mentor at a university where trials are underway on one use of the product.
Variable
K
G
IP
M
Notes
Significant start up and ongoing costs
Regional mentoring scheme; university links
Trademarks
Able to undertake most manufacturing
73
Score
0.67
1
0.66
0.83
B
S
Good professional and personal networks
Regular sales being made; slowly expanding
1
0.6
B5
A radical building design that has originated with the inventor musing upon a personal
problem about a decade earlier that has evolved into a highly designed technical achievement.
The inventor has a design background and has accessed extensive business networks,
including venture capital.
Both the inventor and a colleague expressed frustration at the policies and practices of
regional councils and BRANZ. With two patents on this innovation, the inventor also has
several trademarks. In working through a Chinese manufacturer, he has admitted some IP will
be stolen but accepts that as one of the costs of working there and at the time of the interview
he was attempting to gain an interest in another factory to not only mitigate IP risks but to
access more advanced facilities. Several show homes in key locations, brochures, networking,
word-of-mouth, and a website have helped build national sales, and international sales are
growing. (Australian market may be given over through a licensing arrangement with a
previous business partner).
Variable
K
G
IP
M
B
S
Notes
Considerable finance accessed
NZTE support
Two patents and several trademarks
Manufactured in China
Extensive business activities and links
Good sales in national market; growing international sales
Score
1
1
1
0
1
1
B6
This case is an insulating product made from a recycled waste product. Very little financing
has been involved with the inventor coming up with cheap alternatives and self designed and
built machinery to enable production. While the innovation is regularly featured in regional
sustainability debate, the inventor is strongly focused on making a successful business case
first and foremost
Strong local ties were involved. Employees were often sourced from local work schemes, and
the business operated in collaboration with the local city council.
Variable
K
G
IP
M
B
S
Notes
Limited financial capital
Strong local council support
Copyright; experience with IP accumulated on previous innovation
Manufacturing and installation skills all in-house
Sole business
Strong regional sales
Score
0.06
1
0.23
1
0
0.6
B7
An innovation that has sat with the inventor, a professional with a wide range of interests
including the creative arts, and is designed to provide the owners of a structure the ability to
take it apart and reassemble it on another site.
Variable
K
G
IP
Notes
Significant accumulated costs
No govt sought
Operates with Creative Commons open access; has previous patent experience
74
Score
0.56
0
0.03
M
B
S
Works closely with an associate
Several business and personal interests ongoing
Prototype erected
0.83
1
0.2
B8
The inventor has over 40 years experience in the building industry and has been trying to
promote his simple innovation for about 4 years and at least $100,000 investment. No
government assistance has been sought, and BRANZ is seen as part of the problem of
innovation in the building sector. Basic patenting and trade marking have been done through
an independent IP lawyer.
This inventor expressed a strong patriotic approach to manufacturing: I get them made in
Auckland because I refused to get them made in China, I wouldn’t do it there I prefer it to be
a New Zealander and I would obviously cut my profit to do that.
Sales had been very limited and the inventor had to decide have much more time, effort and
money to invest.
Variable
K
G
IP
M
B
S
Notes
Self-financed, approx. $100,000
No govt assistance
NZ and Australian patents; Trademarked
Manufactured in Auckland
Well networked through the building sector as well as instigating several
projects in other areas.
Few sales
Score
0.6
0
0.88
0
1
0.4
B9
This innovation dates back over 15 years, the current business partners being his daughter and
son-in-law. While self-financed originally, strong commercial partnerships have been in place
for several years The company employs ten people but struggles to find qualified staff,
possibly due to being located somewhat outside a main population centre. The inventor did
not follow up IP issues in the first stages of innovation and this was proving an issue to be
resolved for the continuing expansion of the business.
Raw materials and some manufacturing were done within the region. An additional
innovation was with one part of the manufacturing process and this was patented. The son-inlaw had excellent networks that included a mentor who was CEO of a significant industry
leader.
Variable
K
G
IP
M
B
S
Notes
Corporate partnerships
No govt assistance
NZ and international patents; one Trademark
Most manufacturing done within purpose-built factory
Good industry links through commercial relationships; also benefits from a
well-placed mentor
Strong national sales
Score
1
0
0.88
0.83
1
0.8
B10
This case was an invention by a tradesman who, in his words, “was struck by these bright
bucks …coming along finding these little areas in the building industry and making money
out of it and I was sitting there nailing nails in thinking I should be able to get some part of
that …”. Asking the advice of friends and colleagues along the way, he has successfully dealt
75
with marketing and compliance issues. The inventor’s wife contributes through significant
experience in finances.
The recession at the time of the interview (2009) had severely negatively affected sales but
there was hope of an increase in sales.
Variable
K
G
IP
M
B
S
Notes
Self-financed, approx. $200,000
No govt support (but support is now being sought)
Trademark and several registered designs, including in Australia
Manufactured by a local firm
Limited trade networks
Sales slumped with recession but picking up
Score
0.74
0
0.88
0
0
0.6
B11
This innovation is developed by a tradesman who has come up with several products in the
building sector. This particular product came from an idea for a novel aid for builders about
10 years ago. Discovering a US patent very similar to his concept, he personally negotiated its
purchase. After building a prototype and getting positive feedback, he then sought local
manufacturer. Difficulties have arisen over fine-tuning the products as two key people left the
firm:
After 18 months and quite a lot of money I said well I know what
works, what I had to start with, so we are going to do it this way now
and that’s when we started to make a bit of progress.
A distributor had just been contracted. A key stumbling block was the non-alliance with the
Australian market and difficulties in accessing the US, where he has imported new products
from before.
Variable
K
G
IP
M
B
S
Notes
Self-financed approx. $250,000
No govt assistance sought
NZ, Australian and US patents
Initial prototypes built but manufacturing primarily done by small engineering
firm
Trade networks; growing innovation links
Some sales but struggling to expand nationwide and to export
Score
0.8
0
0.88
0.33
0
0.6
B12
This innovation originated with an experienced builder who adapted a process for a different
product and has found it outperforms comparable products. Significant investments in
machinery, time and money have been made and good regional sales have been achieved,
with national sales strengthening. No government assistance has been sought, and one patent
and a trademark have been secured; the inventor’s wife has been a significant force behind
administrative and promotional efforts.
At this stage all manufacturing is in-house but increasing demand will challenge the scale the
operation is working at.
Variable
K
G
IP
M
Notes
Major financial investment
No govt. assistance
One patent and one trade mark
All manufacturing in-house
76
Score
0.97
0
0.66
1
B
S
Wider industry business interests
Growing national sales
1
0.8
B13
From an idea to successful launch in just three years, this product underwent considerable
investigation by/with a regional development organisation and provided $50,000 funding.
One of the conclusions of the report being it would have to be manufactured in China. Selffinanced with $60,000, family members subsequently invested up to an additional $40,000. A
brother-in-law of the inventor has worked in marketing efforts, including arranging for
manufacturing in China and researching markets in North America and Europe. A New
Zealand distributor based in Auckland has been selected, as has an Australian distributor.
The inventor, who is a tradesman himself, has found his fellow tradesmen slow to take up
new ideas. However, considerable promotion has occurred through innovation and trade
magazines, as well as a well-designed website. This inventor keeps up-to-date with relevant
developments and as he says: “I’m in the best laboratory ever!”
Variable
K
G
IP
M
B
S
Notes
Approx. $100,000, self-financed and family investment
Regional development organisation
Four patents and a trademark
Made in China
Wider business engagement
Expanding national sales with prospects for exports
Score
0.74
1
0.99
0
1
0.8
B14
This innovation is a simple aid to minimise the physical effort builders exert in a repetitive
labour-intensive process. Despite its simplicity, this innovation has struggled to gain
recognition and sales. No assistance was sought from government organisations, and the
inventor had limited business networks to access information, advice, and mentoring.
Variable
K
G
IP
M
B
S
Notes
Minimal investment
No government or regional support sought
Patented
Some manufacturing undertaken
Tradesman
Poor sales
Score
0.06
0
0.23
0.33
0
0.2
B15
This case is also a simple innovation to aid trades people in a repetitive, labour-intensive
aspect of their work. While coming up with other inventions for his own business, this is the
first invention he’s commercialised. Self-financed (including through the sale of his house),
this innovator has successfully pulled together all the various components of an innovation
project and is now in the position of advising other NZ inventors as well as importing other
trade-related products. Other expertise is contracted: manufacturing, packaging, promotional
material (including a website with embedded video), and patent advice.
The inventor contacted NZTE but was not successful. Exhibiting at a US trade show enabled
a large number of useful contacts in the US market that, at the time of the interview, were
being ‘whittled down’ to a potential partner.
It’s like a snowball. It just gets bigger and bigger as it goes
along…once you start, you’ve got to keep going.
77
Variable
K
G
IP
M
B
S
Notes
Self-financed (incl. sale of house and income from business), approx. $200,000
Unsuccessful request to for funding
Early interactions with patent attorney
Manufactured
Original business maintained while new business established. Extensive
networks, including international partners, established
Good sales, nation market beginning to improve
Score
0.74
0
1
0
1
0.8
B16
This innovation came about through an attempt to systematise residential housing
construction. The current business is run by the son of the inventor, who had a long history of
self-employment and business start-ups. Some market research has been done for Australia,
and plans exist for expansion into the UK.
Variable
K
G
IP
M
B
S
Notes
Financed through family firm
Support from NZTE
Have concentrated on trademarks (4)
Mainly in-house
Other businesses in building sector; nation-wide licensed dealerships
Strong national sales.
Score
1
1
0.97
0.67
1
0.8
B17
This potentially radical innovation has involved significant research over a period of 12 years.
Attempts to collaborate with other companies, including international, has been difficult,
although now fruitful discussions have led to a point where progress is being made. Plans to
manufacture in a regional locality have been stymied through port access issues.
This case is one of three case studies scored 0.5 for success at it is very much a work-inprogress and is currently said to be at the point of take-off with negotiations between several
major companies.
Variable
K
G
IP
M
B
S
Notes
Significant investment, approx. $1.6 million
Assistance from NZTE and a university researcher.
One patent, trademarks
Primarily in-house; several key inputs imported.
Other businesses
Possibly at point of take-off
Score
1
1
0.66
0.83
1
0.5
Energy
E1
The innovation by a trained professional in one field who conceived of a novel heating water
method, this invention was only intended for family use. Positive responses from friends and
contacts saw the project take off as an innovation. It is now being exported.
This case study seems to have captivated the imagination of several key people including the
inventor’s bank manager and NZTE staff.
Variable
K
G
IP
Notes
Primarily self-financed
$15,000 + $5,000 reimbursement from NZTE; strong regional support
Copyright and patent; previous IP experience
78
Score
0.55
1
0.66
M
B
S
Limited; most contracted out with strong reliance on contractors for most
components
Pre-existing professional network; strong links through proactive networking
and alternative business activity
Growing national and international sales
0.17
1
1
E2
This case study originated with a family farming venture but is classified as an energy
innovation due to the character of the invention itself. The innovation is controlled by a
father/son partnership. Manufacturing was originally by a local firm but has since moved to
the Australia branch.
Having achieved very good national sales within the farming sector (particularly with dairy
farmers), the product has consistently struggled over several years to get recognition beyond
farming, despite high performance specifications and obvious wider application.
Variable
K
G
IP
M
B
S
Notes
Self-financed through farming business, approx. $200,000
Some interaction but no support
Strong NZ and international IP protection
Now manufactured by Australian firm
Limited to farming sector and some engineering circles
Very good national sales
Score
0.74
0
0.98
0
0
0.8
E3
This case study is one of the larger-scale innovations investigated with the product weighing
up to thirty tonnes and about a million dollars spent on R&D. Manufacturing is solely inhouse, with employees building machines as their schedules suit. It is planned to eventually
contract out most manufacturing, with Europe being the preferred location due to the skills
base and potential market.
The original inventor has passed some control, especially marketing and financing, to a
contracted staff member who has an extensive NZ and international business background.
This person expressed concerns over the lack of coordination in NZ’s innovation and energy
policies.
Variable
K
G
IP
M
B
S
Notes
Self-financed; venture capital being sought
Awarded $70,000 FRST funding; minor collaboration with a university
Extensive domestic and international IP coverage
Currently solely in-house
Extensive national and growing international connections
Slow but growing sales
Score
1
1
1
1
1
0.6
E4
This case study represents one invention by a serial inventor, a qualified engineer who lived
in an isolated rural area and worked repairing and maintaining large-scale equipment.
Collaboration was sought with a university laboratory for testing but this relationship did not
formalise and has since ended. Several patents pertaining to other inventions have been
lodged and ‘voided pre-acceptance’.
Variable
K
G
Notes
Self-financed
No government help sought
79
Score
0.2
0
IP
M
B
S
Several lapsed patents Regular interaction with IP area;
Inventor undertakes all manufacturing
Good networks through engineering specialty; otherwise limited
No sales and little interest
0.66
1
0
0.2
E5
This innovation comprises a home-heating system that has struggled for a small market share
but sales are increasing. Most customers are non-NZers, considered by the (North American
immigrant) inventor to reflect a certain attitude:
NZers I think like to live like Third World country people in winter. In
fact they wear it like a badge of honour, that you only live in one
room you don’t have to heat the rest of the house.
Variable
K
G
IP
M
B
S
Notes
Self-financed
No government support
Patent pending
Essentially now providing plans; supply of various components contracted,
including offshore suppliers
Several varied business interests, including offshore
Regular if slow uptake
Score
0.6
0
0.88
0.17
1
0.6
E6
This innovation came about through an ongoing collaboration in a university that began in
1981 with a strong philosophy towards supporting energy supply to isolated communities in
the developing world: “Purely altruistic” as one of the inventors said.
Variable
K
G
IP
M
B
S
Notes
Limited finance available
Some NZTE aid; considerable use of publicly-funded university resources
No IP sought
Mainly built by inventors
Other businesses involving innovation very successful; good research
networks; wide contacts in innovation circles
No sales
Score
0.2
1
0.03
0.67
1
0.2
E7
This very successful innovation has rapidly achieved great publicity and growing
international interest through its technical qualities. The product has been developed by an
engineer who has invested considerable time and capital. With two partners the business has
evolved around his invention and has won a significant award and benefitted greatly from the
associated media coverage.
Good support was received from the local regional innovation organisation as well as EECA.
Variable
K
G
IP
M
B
S
Notes
Self-financed and business partners
Regional and EECA support
Patented and trademarked; previous IP experience
Most manufacturing done by subsidiary
Wide industry and innovation networks through business associates
Strong national sales; opportunity to export
80
Score
0.98
1
0.66
0.83
1
0.8
E8
A design concept without any prototype, this invention has had minimal investment and
support. Essentially a small collaborative project between university researchers, the key
researcher having retired.
A realism, common to all energy innovators, was expressed: “Economics, that’s everything. If
you can’t match the price then forget it and so it would be a case of making it, it’s got to be
very simple…”
Variable
K
G
IP
M
B
S
Notes
Very little financial support
No government support
Copyright
Limited to drawings and models
Limited to specialised research network
Concept and model only
Score
0.02
0
0.23
0.67
0
0
E9
An invention that came about through a serial inventor and expert in one field who applied his
skills to an area of personal interest to come up with a technological fix in response to
regional environmental strategies that were going to limit personal home heating options. A
strong background in electronics, including several innovations and patents, this innovator
lobbied local and regional government officials over time to argue his case, all the while
perfecting his innovation.
I’ve always wanted to be on the cutting edge of new technology.
A FRST grant of $90,000 was received ‘late in the day’. The inventor has nothing to do with
manufacture or sales and is now working on, among other things, a wind turbine.
Variable
K
G
IP
M
B
S
Notes
Self-financed, approx. $100,000
FRST grant $90,000
One patent
All contracted out.
Other businesses
Strong sales
Score
0.6
1
0.88
0
1
1
E10
An outcome of three colleagues with an engineering background, collaborating on a
sustainable energy project that is well-developed if not yet commercially strong.
Manufacturing is at the prototype stage with significant collaboration from various local
suppliers, some of whom have had to innovate themselves to solve various problems.
Variable
K
G
IP
M
B
S
Notes
Approximately $150,000 invested
Government and regional development grants received
Three patents, (one international, one voided pre-acceptance)
Mainly in-house
Several other business engagements
One the verge of commercial release
81
Score
0.74
1
0.79
0.83
1
0.5
Appendix 12
NZ Technology Innovation Statistics: Change in Technology in New Zealand Businesses
Total number of businesses(2)
2007
Not at all
2007
2008
2008
Degree of technological change
To a minor degree
To a major degree
2007
2008
2007
2008
Percent(3)
Completely
2007
2008
Business size
6–19 employees
26,316
26,538
40
43
51
48
5
5
0
0
20–49 employees
6,342
6,270
32
35
60
58
7
5
0
0
50–99 employees
1,758
1,779
23
24
64
66
11
7
1
0
100+ employees
1,467
1,485
18
20
71
70
9
9
0
0
3,042
3,039
41
46
53
47
3
4
0
0
Industry
Agriculture, forestry and fishing
Mining
Manufacturing
Elect., gas, water, waste services(4)
99
105
30
37
61
60
6
0
0
0
5,442
5,343
35
39
56
54
7
6
0
0
102
105
32
34
62
57
6
9
0
0
Construction
3,693
3,786
40
45
51
44
2
5
1
0
Wholesale trade
2,961
2,955
28
32
59
59
12
6
0
0
Retail trade
4,437
4,335
38
43
51
50
5
2
0
0
Accommodation and food services
3,975
4,140
58
58
38
36
2
2
0
0
Transport, postal and warehousing
1,440
1,419
36
38
60
54
4
5
0
0
Information media and telecommunications
357
357
20
20
64
65
14
13
1
0
Financial and insurance services
582
552
23
26
61
62
12
12
1
0
Rental, hiring and real estate services
945
954
27
35
60
55
7
7
2
0
Professional, scientific and technical services
3,393
3,501
26
22
61
66
12
11
0
0
Administrative and support services
1,332
1,374
37
41
50
49
8
7
0
2
645
645
36
27
56
60
6
11
0
1
1,953
1,944
30
35
65
58
3
4
1
0
Education and training
Health care and social assistance
Arts and recreation services
Other services
Overall
444
474
32
42
58
51
4
4
1
0
1,032
1,044
36
44
53
46
6
6
0
1
35,883
36,075
37
40
54
51
6
5
0
0
(1) This refers to the last financial year as at August of each collection period.
(2) For more information on the businesses included, refer to the technical notes of this release.
(3) Percentages are of all New Zealand businesses in each business size or industry category.
(4) Results for the electricity, gas, water and waste services industry should be treated with caution due to the small number of businesses in this category.
Source: http://www.stats.govt.nz/NR/rdonlyres/EF8F17B1-76C0-4F9D-8AB949CBEC5F4A52/41217/BusinessOperationsSurvey2008AllTables1.xls
82
Appendix 13
New Zealand technology innovation statistics: comparison with best commonly available technology
Total number of businesses
2007
Fully up-to-date
2007
2008
Core equipment comparison
Up to 4 years behind
Up to 10 years behind
2007
2008
2007
2008
2008
More than 10 years behind
2007
2008
Percent
Business size
6–19 employees
26,316
26,538
51
48
23
27
5
5
2
2
20–49 employees
6,342
6,270
54
51
25
28
5
6
2
2
50–99 employees
1,758
1,779
54
51
27
27
6
6
2
2
100+ employees
1,467
1,485
46
46
33
33
8
8
3
2
3,042
3,039
45
47
29
23
7
8
4
2
99
105
52
43
24
26
9
14
6
3
5,442
5,343
35
33
30
31
13
14
5
5
102
105
50
46
24
26
12
9
0
3
Construction
3,693
3,786
69
63
9
18
0
0
0
1
Wholesale trade
2,961
2,955
49
39
25
32
5
5
2
2
Retail trade
4,437
4,335
52
47
20
20
4
7
1
2
Accommodation and food services
3,975
4,140
44
40
25
37
8
6
1
3
Transport, postal and warehousing
Industry
Agriculture, forestry and fishing
Mining
Manufacturing
Elect., gas, water, waste services
1,440
1,419
48
49
28
32
12
6
4
0
Information media and telecommunications
357
357
59
54
29
34
5
3
1
1
Financial and insurance services
582
552
56
56
26
28
2
3
1
1
Rental, hiring and real estate services
945
954
52
60
28
26
3
2
1
0
Professional, scientific, technical services
3,393
3,501
67
63
27
30
2
0
0
0
Administrative and support services
1,332
1,374
53
53
29
27
5
3
0
0
645
645
62
63
28
21
1
0
0
0
1,953
1,944
67
61
18
24
0
1
0
0
444
474
49
38
23
32
1
7
3
2
1,032
1,044
48
53
28
26
4
5
0
1
35,883
36,075
52
49
24
27
6
6
2
2
Education and training
Health care and social assistance
Arts and recreation services
Other services
Overall
Source: http://www.stats.govt.nz/NR/rdonlyres/EF8F17B1-76C0-4F9D-8AB9 49CBEC5F4A52/41217/BusinessOperationsSurvey2008AllTables1.xls
83
84
RESEARCH REPORTS:
289 Nanotechnology – Ethical and Social Issues: Results
from a New Zealand Survey
Cook, Andrew and Fairweather, John 2006
304 Cultural Models of GE Agriculture in the United
States (Georgia) and New Zealand (Canterbury)
Rinne, Tiffany 2008
290 Single Farm Payment in the European Union and
its Implications on New Zealand Dairy and Beef
Trade
Kogler, Klaus 2006
305 Farmer Level Marketing: Case Studies in the South
Island, of New Zealand
Bowmar, Ross K. 2008
291 Organic Certification Systems and Farmers’
Livelihoods in New Zealand
Herberg, L.A. 2007
292 Operations at Risk: 2006: Findings from a Survey
of Enterprise Risk in Australia and New Zealand
Smallman, Clive 2007
293 Growing Organically? Human Networks and the
Quest to Expand Organic Agriculture in New
Zealand
Reider, Rebecca 2007
294 EU Positions in WTO Impact on the EU, New
Zealand and Australian Livestock Sectors
Santiago Albuquerque, J.D. and Saunders, C.S. 2007
295 Why do Some of the Public Reject Novel Scientific
Technologies? A synthesis of Results from the Fate
of Biotechnology Research Programme
Fairweather, John, Campbell, Hugh, Hunt, Lesley, and
Cook, Andrew 2007
306 The Socio Economic Status of the South Island High
country
Greer, Glen 2008
307 Potential Impacts of Biopharming on New Zealand:
Results from the Lincoln Trade and Environment
Model
Kaye-Blake, William, Saunders, Caroline, de Arãgao
Pereira, Mariana 2008
308 The Key Elements of Success and Failure in the NZ
Sheep Meat Industry from 1980 - 2007
McDermott, A., Saunders, C., Zellman, E., Hope, T.
and Fisher, A. 2008
309 Public Opinion on Freshwater Issues and
Management in Canterbury
Cook, Andrew 2008
310 Biodiversity Management: Lake Rotoiti Choice
Modelling Study
Kerr, Geoffrey N. and Sharp, Basil N.H. 2008
296 Preliminary Economic Evaluation of Biopharming
in New Zealand
Kaye-Blake, W., Saunders, C. and Ferguson, L. 2007
311 The Key Elements of Success and Failure in the NZ
Kiwifruit Industry
Kilgour, M., Saunders, C., Scrimgeour, F. and Zellman,
E. 2008
297 Comparative Energy and Greenhouse Gas
Emissions of New Zealand’s and the UK’s Dairy
Industry
Saunders, Caroline and Barber, Andrew 2007
312 The Key Elements of Success and Failure in the NZ
Venison Industry
Shadbolt, N.M., McDermott, A., Williams, C., Payne,
T., Walters, D. and Xu, Y. 2008
298 Amenity Values of Spring Fed Streams and
Rivers in Canterbury, New Zealand:
A Methodological Exploration
Kerr, Geoffrey N. and Swaffield, Simon R. 2007
313 The Key Elements of Success and Failure in the NZ
Dairy Industry
Conforte, D., Garnevska, E., Kilgour, M., Locke, S.
and Scrimgeour, F. 2008
299 Air Freight Transport of Fresh Fruit and
Vegetables
Saunders, Caroline and Hayes, Peter 2007
314 A Review of Research on Economic Impacts of
Climate Change
Kaye-Blake, W., Greenhalgh, S., Turner, J., Holbek, E.,
Sinclair, R., Matunga,, T. and Saunders, C. 2009
300 Rural Population and Farm Labour Change
Mulet-Marquis, Stephanie and Fairweather, John R.
2008
301 New Zealand Farm Structure Change and
Intensification
Mulet-Marquis, Stephanie and Fairweather, John R.
2008
302 A Bioeconomic Model of Californian Thistle in New
Zealand Sheep Farming
Kaye-Blake, W. and Bhubaneswor, D. 2008
303 The Impact of Wilding Trees on Indigenous
Biodiversity: A Choice Modelling Study
Kerr, Geoffrey N. and Sharp, Basil M.H. 2007
315 Managerial Factors in Primary Production: Data
from a sample of New Zealand Farmers with an
Emphasis on Experience as a Factor in Success
Nuthall, Peter 2009
316 not yet published
317 Economic Strategy Issuesfor the New Zealand
Region in the Global Economy
Saunders, Caroline, Dalziel, Paul and Kaye-Blake,
William 2009
318 Multi-agent Simulation Models in Agriculture: A
Review of their Construction and Uses
Kaye-Blake, W., Li, F. Y., Martin, A. M., McDermott,
A., Rains, S., Sinclair, S. and Kira, A. 2010